EXHIBIT 4.1
RIGHTS AGREEMENT
between
METASOLV, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
Dated as of October 24, 2001
TABLE OF CONTENTS
Section 1. Certain Definitions............................................. 1
Section 2. Appointment of Rights Agent.....................................10
Section 3. Issue of Right Certificates.....................................10
Section 4. Form of Right Certificates......................................12
Section 5. Execution, Authentication and Delivery..........................15
Section 6. Registration, Registration of Transfer and Exchange.............16
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates........17
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights...18
Section 9. Cancellation and Destruction of Right Certificates..............21
Section 10. Reservation and Availability of Shares..........................21
Section 11. Record Date.....................................................22
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights.......................................................23
Section 13. Certificate of Adjusted Purchase Price or Number of Shares......33
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power........................................................33
Section 15. Fractional Rights and Fractional Shares.........................35
Section 16. Rights of Action................................................37
Section 17. Agreement of Right Holders......................................38
Section 18. Right Certificate Holder Not Deemed a Stockholder...............39
Section 19. Concerning the Rights Agent.....................................40
Section 20. Duties of Rights Agent..........................................41
Section 21. Merger or Consolidation or Change of Name of Rights Agent.......44
Section 22. Change of Rights Agent..........................................44
Section 23. Issuance of New Right Certificates..............................46
-i-
Section 24. Redemption......................................................46
Section 25. Mandatory Redemption and Exchange...............................47
Section 26. Notice of Certain Events........................................49
Section 27. Securities Laws Registrations...................................50
Section 28. Notices.........................................................51
Section 29. Supplements and Amendments......................................52
Section 30. Successors......................................................53
Section 31. Benefits of this Agreement......................................54
Section 32. Severability....................................................54
Section 33. Governing Law...................................................54
Section 34. Counterparts....................................................54
Section 35. Descriptive Headings............................................54
Section 36. Board of Directors..............................................54
Exhibits
--------
Exhibit A - Certificate of Designation of Series A
--------- Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
---------
Exhibit C - Summary of Rights to Purchase Preferred Shares
---------
-ii-
RIGHTS AGREEMENT
----------------
This Rights Agreement (this "Agreement"), dated as of October 24, 2001,
is between MetaSolv, Inc., a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent.
WHEREAS, the Board of Directors, having determined its actions to be in
the interests of the Company, has authorized the creation of Rights, has
authorized and directed the issuance to the holders of record of Common Shares
of the Company outstanding as of the Close of Business on November 5, 2001 (the
"Record Date"), of one Right with respect to each Common Share of the Company
outstanding on the Record Date, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date; and
WHEREAS, the Board of Directors has authorized and directed that the
terms and conditions under which the Rights are to be distributed, including
without limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights
agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
-------------------
the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the Voting Shares then
outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any trustee of or fiduciary with respect to any such
plan when acting in such capacity.
-1-
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" solely as the result of an acquisition of Voting Shares by the
Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to
the amount of Voting Shares necessary for such person to become an
Acquiring Person; provided, however, that, if a Person shall become the
Beneficial Owner of the amount of Voting Shares necessary for such
person to become an Acquiring Person by reason of share purchases by
the Company and shall, after such share purchases by the Company and at
a time when such Person is the Beneficial Owner of the amount of Voting
Shares necessary for such person to become an Acquiring Person, become
the Beneficial Owner of any additional Voting Shares, then such Person
shall be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors 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,
but in any event within the time period directed by the Board of
Directors, a sufficient number of Common Shares 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. Nothing in this Section 1(a) shall affect the effect or
application of Section 8(e).
(b) "Agreement" shall mean this Rights Agreement as the same
may be hereafter amended from time to time.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "own beneficially" any securities which (without
duplication):
-2-
(1) such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is
exercisable immediately or only after the passage of time,
compliance with regulatory requirements, the fulfillment of a
condition or otherwise) pursuant to any oral or written
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members (A) with respect to a bona fide public offering of
securities or (B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; or the
right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (i)
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (ii) securities issuable
upon exercise of Rights at any time prior to any Person
becoming an Acquiring Person;
(2) 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 Exchange Act) or has a
"pecuniary interest" or an "indirect pecuniary interest" in
(as determined pursuant to Rule 16a-1(a)(2) of the Exchange
Act), in either case 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 (2) as a result of an agreement,
arrangement or understanding to vote such security (A) which
arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation
made pursuant to,
-3-
and in accordance with, the applicable rules and regulations
of the Exchange Act and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(3) are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any oral or written
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members (A) with respect to a bona fide public offering of
securities or (B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act) for the
purpose of acquiring, holding, voting (other than voting
pursuant to a revocable proxy as contemplated by the proviso
to subparagraph (2) of this paragraph) or disposing of any
securities of the Company.
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding," when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
(e) "Board of Directors" means the Board of Directors of the
Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Texas 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., Dallas, Texas time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas time,
on the next succeeding Business Day.
-4-
(h) "Closing Price", with respect to any security, shall mean
the last sale price, regular way, on a specific Trading Day or, in case
no such sale takes place on such Trading 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 such security is not then listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not
then listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System or such other system then in use, or, if on any such Trading Day
such security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in such security selected by the Board of
Directors. If such security is not publicly held or so listed or
traded, "Closing Price" shall mean the fair value per unit of such
security as determined in good faith by the Board of Directors, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
(i) "Common Shares" when used with reference to the Company
shall mean shares of capital stock of the Company which have no
preference over any other class of stock with respect to dividends or
assets, which are not redeemable at the option of the Company and with
respect to which no sinking, purchase or similar fund is provided and
shall initially mean the shares of Common Stock, par value $.005 per
share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a
corporation, mean the capital stock (or equity interest) with the
-5-
greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person and, if used with reference to any
other Person, mean the equity interest in such Person (or, if the net
worth determined in accordance with generally accepted accounting
principles of another Person (other than an individual) which controls
such first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting power or
managerial power with respect to the business and affairs of such
Person. Common Shares used without reference to the Company or any
other Person shall be deemed to refer to Common Shares of the Company
unless the context otherwise requires.
(j) "Company" shall mean MetaSolv, Inc., a Delaware
corporation, and its successors.
(k) "Company Order" means a written request or order signed in
the name of the Company by its Chairman of the Board, its President,
its Chief Executive Officer or a Vice President, and by its Chief
Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Rights Agent.
(l) "Corporate Trust Office" means the office of the Rights
Agent designated in Section 28 of this Agreement.
(m) "Distribution Date" shall mean the Close of Business on
the earlier of (1) the tenth Business Day after the Shares Acquisition
Date or (2) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of commencement
by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan
when acting in such capacity) of, or after the date of the first public
announcement of, the intent of any Person (other than the Company, any
Subsidiary of the
-6-
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any trustee of or fiduciary with respect to any such
plan when acting in such capacity) to commence a tender or exchange
offer, the consummation of which would result in any Person becoming an
Acquiring Person; provided, however, that an occurrence described in
clause (2) of this definition above shall not cause the occurrence of
the Distribution Date if the Board of Directors shall, prior to the
Close of Business on such tenth Business Day (or such later date as
described in clause (2) above), determine that such tender or exchange
offer is spurious, unless, thereafter, the Board of Directors shall
make a contrary determination, in which event the Distribution Date
shall occur on the later to occur of the Close of Business on such
tenth Business Day (or the Close of Business on such later date as
described in clause (2) above) or the Close of Business on the date of
such latter determination.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934 and any successor statute thereto.
(o) "Final Expiration Date" shall mean the Close of Business
on November 4, 2011.
(p) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, joint
venture, association, trust, unincorporated organization, group or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(q) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights and preferences set forth in the form of Certificate
of Designation of Series A Junior Participating Preferred Stock
attached hereto as Exhibit A, and, to the extent that there is not a
sufficient number of shares of Series A Junior Participating Preferred
Shares outstanding to permit the full exercise of the Rights, any other
authorized shares of preferred stock, par value $.01 per
-7-
share, of the Company having rights and preferences substantially
identical to such Series A Preferred Shares.
(r) "Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
(s) "Record Date" shall have the meaning provided in the
recitals to this Agreement.
(t) "Redemption Date" shall mean the time at which the Rights
are redeemed pursuant to Section 24 herein or the time at which all of
the Rights are mandatorily redeemed and exchanged pursuant to
Section 25 hereof.
(u) "Redemption Price" shall have the meaning specified in
Section 24(b) herein.
(v) "Right" shall mean one preferred share purchase right
which initially represents the right of the registered holder thereof
to purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions set forth herein.
(w) "Right Certificate" shall mean a certificate, in
substantially the form of Exhibit B attached to this Agreement,
---------
evidencing the Rights registered in the name of the holder thereof.
(x) "Rights Agent" shall mean Mellon Investor Services LLC and
any successor thereto appointed in accordance with the terms hereof, in
its capacity as agent for the Company and the holders of the Rights
pursuant to this Agreement.
(y) "Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
(z) "Securities Act" shall mean the Securities Act of 1933 and
any successor statute thereto.
-8-
(aa) "Shares Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition shall
include without limitation a report filed pursuant to Section 13(d) or
Section 16(a) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the outstanding capital stock or
other equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
(cc) "Summary of Rights" shall mean a Summary of Rights to
Purchase Preferred Shares in substantially the form attached as
Exhibit C to this Agreement.
---------
(dd) "Trading Day" shall mean a day on which the principal
national securities exchange on which any of the Voting Shares are
listed or admitted to trading is open for the transaction of business
or, if none of the Voting Shares is listed or admitted to trading on
any national stock exchange, a Business Day.
(ee) "Voting Shares" shall mean (1) the Common Shares of the
Company and (2) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or any liquidation, dissolution or winding up of
the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a
specified percentage of such Voting Shares is, was or will be
beneficially owned or has been voted, tendered, acquired, sold or
otherwise disposed of or a determination of whether a Person has
offered or proposed to acquire a number of Voting Shares comprising
such specified percentage, the number of Voting Shares comprising such
specified percentage of
-9-
Voting Shares shall in every such case be deemed to be the number of
Voting Shares comprising the specified percentage of all the Company's
then outstanding Voting Shares.
(ff) "Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
---------------------------
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any co-Rights Agents.
Section 3. Issue of Right Certificates. (a) Until the Distribution
---------------------------
Date, (1) outstanding Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) (A) with respect to Common Shares that are held
in certificated form, by the certificates for outstanding Common Shares of the
Company and not by separate Right Certificates and (B) with respect to Common
Shares that are held in book-entry form, by a notation in the records of the
Rights Agent (and the records of the Company's transfer agent if different from
the Rights Agent), and (2) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Company will
promptly notify the Rights Agent thereof, and prepare and execute, and the
Rights Agent will countersign and send, by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares of the Company as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
stock transfer records of the Company, a Right Certificate evidencing one Right
for each Common Share so held, subject to adjustments as provided herein. From
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
-10-
(b) On the Record Date, or as soon thereafter as practicable,
the Company will send a copy of a Summary of Rights, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Record Date, at the address of such holder shown
on the stock transfer records of the Company. With respect to Common Shares
outstanding on the Record Date, the certificates evidencing such Common Shares
shall thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the Distribution
Date and the registered holders of Common Shares shall also be the registered
holders of the associated Rights. Until the Distribution Date (or, if earlier,
the Redemption Date or Final Expiration Date), the surrender for registration of
transfer or exchange of (1) any certificate for Common Shares outstanding as of
the Close of Business on the Record Date, with or without a copy of the Summary
of Rights attached thereto, and (2) any Common Shares held in book-entry form,
shall also constitute the surrender for registration of transfer or exchange of
the outstanding Rights associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after the Record Date
and prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of one one-thousandth (1/1000) of a Preferred Share at the same
Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on the Record Date or upon original issue or out of
treasury thereafter, shall also be deemed to be certificates for the Rights and
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend or
-11-
such similar legend as the Company may deem appropriate (but which do not affect
the rights, duties or responsibilities of the Rights Agent) and as is not
inconsistent with the provisions of this Agreement:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between MetaSolv,
Inc. (the "Company") and Mellon Investor Services LLC, dated as of
October 24, 2001, as it may be amended (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described in the Rights
Agreement, Rights issued to or acquired by any Acquiring Person or any
Affiliate or Associate thereof (each as defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, shall, under certain circumstances, become null
and void.
With respect to certificates containing the foregoing legend, until the earlier
of the Distribution Date or the Final Expiration Date, outstanding Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender of any such certificate
for registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of the
outstanding Rights (as such Rights may be amended or supplemented) associated
with the Common Shares represented thereby. The failure to print the foregoing
legend on any certificate or any other defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions of Section
8(e) hereof.
(e) If the Company purchases or acquires any of its Common
Shares after the Record Date, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. (a) The form of Right
--------------------------
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit B hereto and may
---------
-12-
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which do
not affect the rights, duties or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this Agreement, 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 as may be necessary to conform to usage.
Subject to the provisions of Section 23 hereof, the Right Certificates, whenever
issued, shall be dated as of the date of authentication thereof, but, regardless
of any adjustments of the Purchase Price or the number of Preferred Shares (or
other securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after the Record Date and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to purchase
such number of Preferred Shares at the Purchase Price per one one-thousandth
(1/1000) of a Preferred Share as to which a Right would be exercisable if the
Distribution Date were the Record Date; no adjustment of the Purchase Price or
the number of Preferred Shares (or other securities) as to which a Right is
exercisable, or both, effected subsequent to the date of authentication of any
Right Certificate shall be invalidated or otherwise affected by the fact that
such adjustment is not expressly reflected on the face or in the provisions of
such Right Certificate.
(b) Pending the preparation of definitive Right Certificates, the
Company may execute, and upon Company Order the Rights Agent shall authenticate
and send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Right Certificates in lieu of which they are issued and with such appropriate
insertions, omissions,
-13-
substitutions and other variations as the officers executing such Right
Certificates may determine, as evidenced by their execution of such Right
Certificates.
(c) If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Right Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Right Certificates.
(d) Any Right Certificate issued pursuant to Section 3(a) or Section 23
hereof that represents Rights beneficially owned by (1) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (2) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 8(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 7 hereof upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain (to
the extent feasible and to the extent the Rights Agent has been notified
thereof) the following legend:
-14-
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
8(e) of such Agreement.
Section 5. Execution, Authentication and Delivery. (a) The Right
--------------------------------------
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, its Chief Executive Officer or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Right
Certificates may be manual or facsimile.
(b) Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as
provided in this Agreement and not otherwise.
(c) No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
-15-
Section 6. Registration, Registration of Transfer and Exchange. From
---------------------------------------------------
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a rights register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written
-16-
instrument of transfer in form satisfactory to the Company and the Rights
Registrar duly executed, by the holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer. The Rights Agent shall have no
duty or obligation to take any action under any Section of this Agreement which
requires the payment by a Rights holder of applicable taxes and governmental
charges unless and until the Rights Agent is satisfied that all such taxes
and/or charges have been paid.
The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
--------------------------------------------------------
(a) If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Rights Agent (1)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (2) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
(c) Upon the issuance of any new Right Certificate under this Section
7, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may
-17-
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Rights Agent) connected therewith.
(d) Every new Right Certificate issued pursuant to this Section 7 in
lieu of any destroyed, lost or stolen Right Certificate shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Right Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Right Certificates duly issued hereunder.
(e) The provisions of this Section 7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
------------------------------------------------------
Rights. (a) Subject to the provisions of Section 8(e) hereof, the registered
------
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its Corporate Trust Office, together with payment of the Purchase Price
for each one one-thousandth (1/1000) of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of (1) the
Close of Business on the Final Expiration Date, (2) the time of redemption on
the Redemption Date or (3) the time at which such Rights are mandatorily
redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share pursuant to the exercise of a Right shall initially be $45.00,
shall be subject to adjustment from time to time as provided in Sections 12 and
14 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
-18-
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable tax or charge required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (1) (A) requisition from any transfer agent of the Preferred
Shares (or other securities) certificates for such number of one one-thousandths
of a Preferred Share (or other securities) as are to be purchased and registered
in such name or names as may be designated by the registered holder of such
Right Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from such depositary agent
appointed by the Company, depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased and registered in
such name or names as may be designated by such holder (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (2) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 15 hereof, (3)
promptly after receipt of such certificates or depositary receipts registered in
such name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (4) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder. In the event that the Company is obligated
to issue other securities (including Common Shares) of the Company, pay cash
and/or distribute other property pursuant to Section 12(a) hereof, the Company
will make all arrangements necessary so that
-19-
other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when necessary to comply with this Agreement.
(d) If the registered holder of the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Sections 7 and 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if any
Person shall become an Acquiring Person, thereafter any Rights beneficially
owned by (1) such Acquiring Person or an Associate or Affiliate of such
Acquiring Person, (2) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) 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
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which at least a majority of
the Board of Directors has determined is part of a plan or an agreement,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 8(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall notify the Rights Agent when this Section 8(e)
applies and shall use all reasonable efforts to insure that the provisions of
this Section 8(e) and Section 4(d) hereof are complied with, but neither the
Company nor the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its Affiliates,
Associates or transferees hereunder.
-20-
Section 9. Cancellation and Destruction of Right Certificates. All
--------------------------------------------------
Right Certificates surrendered for the purpose of exercise, transfer, split up
or exchange shall, if surrendered to the Company or to any of its other agents,
be delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, pursuant to a Company
Order, destroy such canceled Right Certificates and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 10. Reservation and Availability of Shares. (a) The Company
--------------------------------------
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) The Company further covenants and agrees that it will, from and
after the Distribution Date, cause to be reserved and kept available out of its
authorized and unissued Common Shares or any Common Shares held in its treasury,
the number of Common Shares of the Company that will be sufficient to permit the
exercise in full of all outstanding Rights if adjusted pursuant to Section
12(a)(2).
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the Purchase
Price) at the time of delivery of the certificates representing any such
Preferred Shares or Common Shares be duly authorized, validly issued, fully paid
and nonassessable. The Company further covenants and agrees that it will pay
-21-
when due and payable any and all taxes and governmental charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or depositary receipts therefor) or Common Shares of the
Company upon the exercise of Rights. The Company shall not, however, be required
to pay any tax or charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares or Common Shares of the Company upon exercise of Rights evidenced by
Right Certificates in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares or
Common Shares of the Company upon the exercise of any Rights until any such tax
or charge shall have been paid (any such tax or charge being payable by the
holder of such Right Certificate at the time of surrender thereof) or until it
has been established to the Company's satisfaction that no such tax or charge is
due.
(d) So long as the Common Shares issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to promptly cause, from and after such time
as the Rights become exercisable, all Common Shares and other securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
Section 11. Record Date. Each Person in whose name any certificate for
-----------
Preferred Shares or Common Shares of the Company is issued upon the exercise of,
or upon mandatory redemption and exchange of, Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares represented thereby on, and such certificate shall be dated, (a) in the
case of the exercise of Rights, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes and charges) was made, or (b) in the case of the
mandatory redemption and exchange of Rights, the date of such mandatory
redemption and exchange; provided, however, that, if the date of such surrender
and
-22-
payment or mandatory redemption and exchange is a date upon which the transfer
books of the Company for its Preferred Shares or Common Shares, as the case may
be, are closed, such Person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open. Prior to the
exercise of (or the mandatory redemption and exchange of) the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Shares (or Common Shares of the Company) for which the
Rights shall be exercisable, including without limitation the rights to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
-----------------------------------------------------------
Rights. The Purchase Price, the number and kind of shares of capital stock of
------
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (1) If the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 12(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised thereafter shall be entitled to
receive, upon payment of the Purchase Price for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to
-23-
such date, the aggregate number and kind of shares of capital stock which, if
such Right had been duly exercised immediately prior to such date (at a time
when the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon payment
or effectuation of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 12(a)(1) and Section
12(a)(2), the adjustment provided for in this Section 12(a)(1) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 12(a)(2).
(2) Subject to action of the Board of Directors pursuant to
Section 25 of this Agreement, if any Person shall become an Acquiring Person,
each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of the Company's Common Shares (determined pursuant to Section
12(d)) on the date such Person became an Acquiring Person. If any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
(3) In the event that the number of Common Shares that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (2) of this Section 12(a), the Company shall: (A)
-24-
determine the excess of (1) the value of the Common 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 such Common Shares, upon exercise of the Rights and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have the same value as
shares of Common Shares (such shares of preferred stock, "Common Share
Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty days following the first
occurrence of a Shares Acquisition Date, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (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 Company shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty day
period set forth above may be extended to the extent necessary, but not more
than ninety days after the Shares Acquisition Date, in order that the Company
may seek stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 12(a)(3), the Company (x) shall provide,
subject to Section 8(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek
-25-
any authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall promptly
notify the Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights Agent that such
suspension is no longer in effect). For purposes of this Section 12(a)(3), the
value of Common Shares shall be the current market price (as determined pursuant
to Section 12(d) hereof) per share of the Common Shares on the Shares
Acquisition Date and the value of any Common Share Equivalent shall be deemed to
have the same value as the Common Shares on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than the
current per share market price of the Preferred Shares (determined pursuant to
Section 12(d) 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 Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(together with the aggregate of any additional consideration required upon
conversion or exchange in the case of any convertible or exchangeable securities
so to be offered) would
-26-
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case all or
part of such subscription or purchase price may be paid in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company or any of its Subsidiaries shall not be deemed outstanding for
the purpose of any computation described in this Section 12(b). The adjustment
described in this Section 12(b) shall be made successively whenever such a
record date is fixed; and, if none of such rights, options or warrants are so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 12(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
then current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights
-27-
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon the exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and, if such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) (1) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily Closing Prices per share of such Common
Shares for the 30 consecutive Trading Days immediately prior to, but not
including, such date; provided, however, that, if the issuer of such Common
Shares shall announce (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares
or (B) any subdivision, combination or reclassification of such Common Shares,
and the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, shall occur during such
period of 30 Trading Days, then, and in each such case, the current per share
market price of the Common Shares shall be appropriately adjusted to reflect the
current market price per Common Share Equivalent.
(2) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (1) of this
Section 12(d). If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares (determined in the manner provided
above) multiplied by one thousand.
-28-
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 12(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 12 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one one-thousandth of a Preferred Share. Notwithstanding the first sentence of
this Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (1) three years from the date of the transaction which
requires such adjustment or (2) the thirtieth day preceding the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement, including
without limitation Sections 8, 10, 11 and 14, with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall, whether or not the
Right Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right
-29-
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price per one
one-thousandth of a Preferred Share, that number of one one-thousandths of a
Preferred Share obtained by (1) multiplying (x) the number of 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 (2) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights outstanding in
lieu of any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made, and shall
promptly give the Rights Agent a copy of such announcement. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. Until such record date, however, any
adjustment in the number of one one-thousandths of a Preferred Share for which a
Right shall be exercisable made as required by this Agreement shall remain in
effect. If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 12(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of
-30-
Right Certificates on such record date Right Certificates evidencing, subject to
Section 15 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and authenticated in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors to be
capital, or below one one-thousandth of the par value, if any, per Preferred
Share issuable upon exercise of the Rights, the Company agrees to take such
corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-thousandths of Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence
-31-
of such event the issuance to the holder of any Right exercised after such
record date of the Preferred Shares or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Shares
or other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 12 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any combination or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in subsection (b) of this Section 12, hereafter
effected by the Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
(n) If at any time prior to the Distribution Date, the Company
shall (1) declare or pay any dividend on the Common Shares payable in Common
Shares or (2) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) the number of Rights outstanding immediately after
such event shall be adjusted,
-32-
either through cancellation of outstanding Rights or through distribution of
additional Rights (but without duplication of the Company's obligations under
Section 3(c)), so that the certificate evidencing each Common Share outstanding
immediately after such event shall also evidence the associated Right to
purchase the same number of one one-thousandths of a Preferred Share as to which
a Right would have entitled the holder thereof to purchase immediately prior to
such event. The adjustment provided for in this Section 12(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision
or combination is effected. If an event occurs which would require an adjustment
under Section 12(a)(2) and this Section 12(n), the adjustments provided for in
this Section 12(n) shall be in addition and prior to any adjustment required
pursuant to Section 12(a)(2).
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts and computations accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
contained therein and shall have no duty with respect to and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power. If, directly or indirectly at any time after a Person has become
-------------
an Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall merge with and into the Company and
the Company shall be the continuing or surviving corporation of such merger and,
in connection with any such merger, all or part of the Common Shares of the
Company shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash
-33-
or any other property, or (c) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or a
series of two or more transactions, assets of the Company or its Subsidiaries
which constitute more than 50% of the assets or which produce more than 50% of
the earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or any Affiliate or Associate of such Person other than the Company or
one or more of its Wholly-Owned Subsidiaries, then, and in each such case, the
Company agrees that, as a condition to engaging in any such transaction, it will
make or cause to be made proper provision so that (1) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) or, if such other Person is a Subsidiary of another Person, of the
Person or Persons (other than individuals) which ultimately control such
first-mentioned Person, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 12(a)(2)) and
dividing that product by (y) 50% of the current per share market price of the
Common Shares of such other Person (determined pursuant to Section 12(d) hereof)
on the date of consummation of such consolidation, merger, sale or transfer; (2)
the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (3) the term
"Company", as used herein, shall thereafter be deemed to refer to such issuer;
and (4) such issuer shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Common Shares in accordance
with Section 10) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights. The Company shall not enter into any transaction of
the
-34-
kind referred to in this Section 14 if at the time of such transaction there are
outstanding any rights, warrants, instruments or securities or any agreement,
understanding or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent an agreement
supplemental to this Agreement complying with the provisions of this Section 14.
The provisions of this Section 14 shall similarly apply to successive mergers or
consolidations or sales or other transfers. For the purposes of this Section 14,
50% of the assets of the Company and its Subsidiaries shall be determined by
reference to the book value of such assets as set forth in the most recent
consolidated balance sheet of the Company and its Subsidiaries (which need not
be audited) and 50% of the earning power of the Company and its Subsidiaries
shall be determined by reference to the mathematical average of the operating
income resulting from the operations of the Company and its Subsidiaries for the
two most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries for such
years; provided, however, that, if the Company has, during such period, engaged
in one or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if they
had occurred at the commencement of such two-year period.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
---------------------------------------
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of
-35-
this Section 15(a), the current market value of a whole Right shall be the
Closing Price of the Rights for the Trading Day immediately prior to, but not
including, the date on which such fractional Rights would have been otherwise
issuable.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result of
any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company shall,
in lieu thereof, pay to such Person at the time such Right is exercised as
herein provided an amount in cash equal to the same fraction (which is not an
integral multiple of one one-thousandth of a Preferred Share) of the current
market value of one Preferred Share. For purposes of this Section 15(b), the
current market value of a Preferred Share shall be the Closing Price of a
Preferred Share for the Trading Day immediately prior to, but not including, the
date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(2) or
any mandatory redemption and exchange contemplated by Section 25 occur, the
Company shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and
-36-
exchange, a Person would otherwise be entitled to receive a fractional Common
Share of the Company upon exercise of any Right Certificate or upon mandatory
redemption and exchange as contemplated by Section 25, the Company shall, in
lieu thereof, pay to such Person at the time such Right is exercised as herein
provided or upon such mandatory redemption and exchange an amount in cash equal
to the same fraction of the current market value of one Common Share. For
purposes of this Section 15(c), the current market value of a Common Share shall
be the Closing Price of a Common Share for the Trading Day immediately prior to
the date of such exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
(e) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly prepare
and deliver to the Rights Agent a certificate setting forth in reasonable detail
the facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.
Section 16. Rights of Action. (a) All rights of action in respect of
----------------
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any registered
holder of any Rights may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding, judicial or
otherwise, against the Company to
-37-
enforce, or otherwise to act in respect of, such holder's right to exercise such
Rights in the manner provided in the Right Certificate evidencing such Rights
and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
(b) No right or remedy herein conferred upon or reserved to
the registered holder of Rights is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may be
exercised from time to time, and as often as may be deemed expedient, by such
holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
--------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer;
-38-
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree, judgment or ruling lifted or otherwise overturned as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
-------------------------------------------------
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting
-39-
stockholders (except as provided in Section 26) or to receive dividends or
subscription rights or otherwise.
Section 19. Concerning the Rights Agent. (a) The Company agrees to pay
---------------------------
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
administration, delivery, execution and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction), for any
action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability hereunder.
The costs and expenses incurred by the Rights Agent in enforcing this right of
indemnification shall be paid by the Company unless it is determined by order,
judgment, decree or ruling of a court of competent jurisdiction that the Rights
Agent is not entitled to indemnification due to the Rights Agent's gross
negligence, bad faith or willful misconduct. The provisions of this Section 19
and Section 20 shall survive the termination of this Agreement, the exercise or
expiration of the Rights and the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its acceptance and administration of this
Agreement in reliance upon any Right Certificate or certificate for Preferred
Shares, Common Shares or other securities of the Company, Company Order,
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
-40-
to be executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the
Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith, unless and until it has received
such notice in writing.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
----------------------
the duties and obligations expressly imposed by this Agreement (and no implied
duties and obligations) upon the following terms and conditions, by all of which
the Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to, and the Rights Agent shall incur no liability for or in respect of, any
action taken, suffered or omitted by it in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent for
any action taken, suffered or omitted by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
or any other Person only for its own gross negligence, bad faith or willful
misconduct (each as determined by a
-41-
final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action. Any
liability of the Rights Agent under this Agreement shall be limited to $50,000.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not have any responsibility or have
any liability with respect to the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
with respect to the validity or execution of any Right Certificate (except its
authentication thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 12(a)(2)
hereof), a transfer to an Acquiring Person or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
3, 12, 14, 24 and 25, or the ascertainment of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares or Common Shares will,
when issued, be duly authorized, validly issued, fully paid and nonassessable.
-42-
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization
and protection to the Rights Agent, and the Rights Agent shall not be liable for
any action taken, suffered or omitted to be taken by it in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss of the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction) in the
selection and continued employment thereof.
-43-
Section 21. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
for the Common Shares of the Company and the
-44-
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), then any registered
holder of a Right Certificate (or, prior to the Distribution Date, of Common
Shares) may apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be either (a) a Person organized and doing business
under the laws of the United States or of any state of the United States, which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an Affiliate of a
Person described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent for the Common Shares of the Company and the Preferred
Shares, and mail a notice thereof in writing to the registered holders of the
Right
-45-
Certificates. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 23. Issuance of New Right Certificates. Notwithstanding any of
----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new 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 per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of the
----------
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to
Section 25 herein, but shall not be redeemed in any other manner.
(b) The Board of Directors may, at its option, at
any time prior to the time any Person becomes an Acquiring Person redeem all but
not less than all of the then outstanding Rights at a redemption price of one
thousandth of one cent ($0.00001) per Right then outstanding, appropriately
adjusted to reflect any adjustment in the number of Rights outstanding pursuant
to Section 12(i) herein (such redemption price being hereinafter referred to as
the "Redemption Price"). Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates
to exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of a resolution
authorizing and directing the redemption
-46-
of the Rights pursuant to paragraph (b) of this Section 24 (or, alternatively,
if the Board of Directors qualified such action as to time, basis or conditions,
then at such time, on such basis and with such conditions as the Board of
Directors may have established pursuant to such paragraph (b)); thereafter, the
only right of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any redemption resolution
pursuant to paragraph (b) of this Section 24; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after the adoption of any redemption
resolution pursuant to paragraph (b) of this Section 24, the Company shall give
prompt written notice of such redemption to the Rights Agent and to the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agents
for the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares of the Company),
redeem or purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 24 or in Section 25 herein, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
---------------------------------
Directors may, at its option, at any time after any Person becomes an Acquiring
Person, issue Common Shares of the Company in mandatory redemption of, and in
exchange for, all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become null and void pursuant to the
provisions of Section 8(e) hereof) at an exchange ratio of one Common Share for
each two Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 12(a)(2) hereof.
-47-
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such redemption and exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any such Subsidiary, or any trustee of or fiduciary with respect to any
such plan when acting in such capacity), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 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 such number of Common
Shares as is provided in paragraph (a) of this Section 25. The Company shall
promptly give public notice of any such redemption and exchange (with prompt
written notice thereof to the Rights Agent); provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
redemption and exchange. The Company promptly shall mail a notice of any such
redemption and exchange to all 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 mandatory redemption and
exchange shall state the method by which the redemption and exchange of the
Common Shares for Rights will be effected and, in the event of any partial
redemption and exchange, the number of Rights which will be redeemed and
exchanged. Any partial redemption and exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become null and void
pursuant to the provisions of Section 8(e) hereof) held by each holder of
Rights.
(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term
-48-
is defined in Section 12(b) hereof) for Common Shares, at the initial rate of
one one-thousandth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted.
(d) In any exchange pursuant to this Section 25, the Company,
at its option, may substitute for any Common Shares exchangeable for a Right (i)
Common Share Equivalents, (ii) cash, (iii) debt securities of the Company, (iv)
other assets, or (v) any combination of the foregoing, having an aggregate value
which the Board of Directors shall have determined in good faith to be equal to
the current market price of one Common Share (determined pursuant to Section
12(d) hereof) on the Trading Day immediately preceding the date of exchange
pursuant to this Section 25.
Section 26. Notice of Certain Events. If the Company shall, on or after
------------------------
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(2) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Common Shares (by reclassification or
otherwise
-49-
than by payment of dividends in Common Shares) then, in each such case, the
Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of, and record date for, such stock dividend or such distribution of rights or
warrants or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, winding up, subdivision or combination
is to take place and the date of participation therein by the holders of the
Common Shares of the Company or the Preferred Shares, or both, if any such date
is to be fixed. Such notice shall be so given in the case of any action covered
by clause (a), (b) or (g) above at least 20 days prior to the record date for
determining holders of the Preferred Shares or of the Common Shares of the
Company, as the case may be, for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Shares or Common Shares of the Company, as the case may be, whichever
shall be the earlier.
If any of the events set forth in Section 12(a)(2) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 28 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 12(a)(2) hereof.
Section 27. Securities Laws Registrations. To the extent legally
-----------------------------
required, the Company agrees that it will prepare and file, as soon as
practicable following the Distribution Date, and will use its best efforts to
cause to be declared effective, a registration statement under the Securities
Act registering the offering, sale and delivery of the Preferred Shares issuable
upon exercise of the Rights, and the Company will, thereafter, use its best
efforts to maintain such registration statement (or another) continuously in
effect so long as any Rights remain outstanding and exercisable with respect to
Preferred Shares. Should the Rights become exercisable with respect to
securities of the
-50-
Company or one of its Subsidiaries other than Preferred Shares, the Company
agrees that it will, to the extent legally required, promptly thereafter prepare
and file, or cause to be prepared and filed, and will use its best efforts to
cause to be declared effective, a registration statement under such Act
registering the offering, sale and delivery of such other securities and the
Company will, thereafter, use its best efforts to maintain such registration
statement (or another) continuously in effect so long as any outstanding Rights
are exercisable with respect to such securities. The Company further agrees to
use its best efforts, from and after the Distribution Date, to qualify or
register for sale the Preferred Shares or other securities of the Company or one
of its Subsidiaries issuable upon exercise of the Rights under the securities or
"blue sky" laws (to the extent legally required thereunder) of all jurisdictions
in which registered holders of Right Certificates reside determined by reference
to the Rights Register. The Company may temporarily suspend, for a period of
time not to exceed ninety days after the Distribution Date, the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension the Company shall
promptly notify the Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
Section 28. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
-51-
MetaSolv, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company)or by facsimile transmission as follows:
Mellon Investor Services LLC
----------------------------
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
with a copy to:
Melon Investor Services
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
--------------------------
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of any certificates representing Common Shares or any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
-52-
inconsistent with any other provisions herein, to make any other provisions in
regard to matters or questions arising hereunder, or to add, delete, modify or
otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date;
provided that the period during which the Rights may be redeemed may not be
extended at a time when the Rights are not then redeemable; provided further,
however, that, from and after the Shares Acquisition Date, any such amendment or
supplement shall not materially and adversely affect the interests of the
holders of Right Certificates other than an Acquiring Person or transferees of
such Acquiring Person. Without limiting the foregoing, the Board of Directors
may by resolution adopted at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the threshold set forth in the
definition of Acquiring Person herein from 15% to a percentage not less than the
greater of any percentage greater than the largest percentage of the outstanding
Voting Shares then known to the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity) and 10%,
if the Board of Directors shall determine that a Person whose interests are
adverse to the Company and its stockholders may seek to acquire control of the
Company. Upon the delivery of a certificate from an appropriate officer of the
Company, which states that the proposed supplement or amendment is in compliance
with the terms of this Section 29 and, provided such supplement or amendment
does not change or increase the Rights Agent's rights, duties, liabilities or
obligations hereunder, the Rights Agent shall execute such supplement or
amendment.
Section 30. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
-53-
Section 31. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.
Section 32. 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.
Section 33. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 36. Board of Directors. The Board of Directors shall have the
------------------
exclusive power and authority to administer this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors or to the
Company. All such actions, calculations, interpretations and
-54-
determinations that are done or made by the Board of Directors in good faith
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other Persons. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.
-55-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
METASOLV, INC.
Attest:
By: By:
---------------------------- ------------------------------------
Secretary Title:
MELLON INVESTOR SERVICES LLC,
as Rights Agent
Attest:
By: By:
---------------------------- ------------------------------------
Authorized Officer Authorized Officer
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
METASOLV, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
MetaSolv, Inc., a Delaware corporation (the "Corporation"), through the
undersigned duly authorized officer, in accordance with the provisions of
Sections 103 and 151 of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That, the Board of Directors of the Corporation on October 11, 2001,
pursuant to the authority conferred upon the Board of Directors by the Amended
and Restated Certificate of Incorporation of the Corporation (the "Certificate
of Incorporation") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, adopted the following
resolution creating a series of 200,000 shares of Preferred Stock, par value
$.01 per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of Article IV of its Certificate of Incorporation, a series of the
Preferred Stock of the Corporation, par value $.01 per share, be, and it hereby
is, created and that the voting powers, designations, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Series A Junior Participating Preferred Stock:
---------------------------------------------
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Junior Preferred Stock") and the number of shares constituting the Series A
Junior Preferred Stock shall be 200,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Junior 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 A Junior Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Junior Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Preferred Stock, in preference to the holders of Common Stock,
par value $0.005 per share (the "Common Stock"), of the Corporation, and of any
A-1
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable on the first business day of February, May, August and
November in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date") as provided in paragraphs (b) and (c) of this Section 2
in an amount per share (rounded to the nearest cent) equal to the greater of (1)
$1.00 in cash or (2) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount (payable in cash) 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 since the
immediately preceding Quarterly Dividend Payment Date or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. If the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under clause (2) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Junior Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, if no
--------
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share payable in cash
on the Series A Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Series A Junior Preferred Stock as
provided in paragraph (c) of this Section 2.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Junior
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
-------------
Preferred Stock shall have the following voting rights:
A-2
(a) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Junior Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. If the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the 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
was outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Certificate of
Incorporation, as it may be amended from time to time, in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(c) Except as set forth herein or as otherwise provided by law, holders
of Series A Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior 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 A Junior Preferred
Stock outstanding shall have been paid in full, or declared and a sum sufficient
for the payment therefor be set apart for payment and be in the process of
payment, the Corporation shall not:
(1) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock;
(2) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except dividends paid ratably on the Series A Junior
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (as
to both dividends and upon dissolution, liquidation or winding up) to
the Series A Junior Preferred Stock; or
A-3
(4) redeem or purchase or otherwise acquire for consideration
any shares of Series A Junior Preferred Stock or any shares of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the holders of the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Preferred
-----------------
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Series A Junior Preferred Stock unless, prior thereto, the holders of
Series A Junior Preferred Stock shall have received an amount per share (rounded
to the nearest cent) equal to the greater of (1) $1,000 per share, or (2) an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of Common Stock, plus, in either case, an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (b) to the holders of stock ranking on a parity (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock, except distributions made ratably on
the Series A Junior Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such Shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a)(2) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter
--------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are
A-4
exchanged for or changed into other stock or securities, cash or any other
property, or any combination thereof, then in any such case each share of Series
A Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), or any combination
thereof, as the case may be, into which or for which each share of Common Stock
is changed or exchanged. If the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
Section 8. Redemption. The shares of Series A Junior Preferred Stock
----------
shall not be redeemable. So long as any shares of Series A Junior Preferred
Stock remain outstanding, the Corporation shall not purchase or otherwise
acquire for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock unless the Corporation shall substantially concurrently also
purchase or acquire for consideration a proportionate number of shares of Series
A Junior Preferred Stock.
Section 9. Rank. The Series A Junior Preferred Stock shall rank, with
----
respect to payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock; provided that
any class or series of the Corporation's Preferred Stock hereafter created may
expressly provide that such class or series shall be pari passu with the Series
A Preferred Stock with respect to the payment of dividends and distributions,
voting rights and/or distributions upon liquidation, dissolution or winding up
of the Corporation.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences, privileges or special rights of the Series A
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Junior Preferred Stock, voting together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, and attested by its Secretary, this
____ day of October, 2001.
METASOLV, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ATTEST:
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A-6
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER NOVEMBER 4, 2011 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.00001 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS
(AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
METASOLV, 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 October 24, 2001 (the "Rights
Agreement"), between METASOLV, INC., a Delaware corporation (the "Company"), and
Mellon Investor Services LLC (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m., Dallas, Texas time, on November 4, 2011, at
the office of the Rights Agent (or at the office of its successor as Rights
Agent), one one-thousandth (1/1000) of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Shares"), of the Company, at a purchase price of $45.00 per one
one-thousandth (1/1000) of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of November 5, 2001, based
on the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
B-1
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.00001 per Right or (ii) may be exchanged by the Company in whole or in part
for Preferred Shares or shares of the Company's common stock, par value $0.005
per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
B-2
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of ___________________, ____.
ATTEST: METASOLV, INC.
[SEAL]
By:
-------------------------------------- ----------------------------------
Name: Name:
--------------------------------- --------------------------------
Title: Title:
-------------------------------- -------------------------------
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By:
-------------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, hereby sells, assigns
-------------------------------
and transfers unto
-------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to
----------------------
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated as of
----------------------, ------.
----------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------------
Signature
B-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
TO METASOLV, INC.
The undersigned hereby irrevocably elects to exercise
-----------------
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
Please insert social security
or other identifying number:
--------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
--------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated as of
----------------------, ------.
----------------------------------------
Signature
B-5
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 11, 2001, the Board of Directors of MetaSolv, Inc. (the
"Company"), authorized the issuance of one preferred share purchase right (a
"Right") with respect to each outstanding share of common stock, $0.005 par
value (the "Common Shares"), of the Company. The rights were issued on November
5, 2001 to the holders of record of Common Shares on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, $.01 par value (the
"Preferred Shares"), of the Company at a price of $45.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") dated as of October 24, 2001, between the Company and Mellon
Investor Services LLC, as Rights Agent (the "Rights Agent").
Detachment of Rights; Exercise. Initially, the Rights will attach to
------------------------------
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a "Distribution Date" will occur upon close of Business (as defined
in the Rights Agreement) on the earlier of (i) ten business days following a
public announcement that a person or group of affiliated or associated persons
has become an Acquiring Person, or (ii) ten business days following the
commencement or announcement of an intention to commence a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person, subject to the right of the Board of Directors to
defer the occurrence of a Distribution Date upon the occurrence of an event
described in this clause (ii).
In general, a person becomes an Acquiring Person if such person, or a
group of which such person is a member, becomes the beneficial owner of 15% or
more of the Company's outstanding common stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced with respect to any of the Common
Shares outstanding on November 5, 2001, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after November 5, 2001, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of November 5, 2001, even without such notation
or a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
C-1
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 4, 2011 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to become an Acquiring Person, then each
Right then outstanding (other than Rights beneficially owned by the Acquiring
Person which would become null and void) would become a right to buy that number
of Common Shares (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share or other assets or securities of the
Company) that at the time of such acquisition would have a market value of two
times the Purchase Price of the Right.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, if the Company were acquired in a merger or other
business combination transaction or more than 50% of its consolidated assets or
earning power were sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the Purchase Price of the Right.
Preferred Shares. The dividend and liquidation rights, and the
----------------
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate, 1,000
times the dividend declared on each Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to receive a preferential
liquidation payment equal to the greater of (i) $1,000 per share, or (ii) in the
aggregate, 1,000 times the payment made on each Common Share. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per Common Share. Each whole Preferred Share shall be entitled to 1,000
votes on all matters submitted to a vote of the stockholders of the Company, and
Preferred Shares shall generally vote together as one class with the Common
Stock and any other capital stock entitled to vote thereon on all matters
submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
----------------------------------
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
C-2
Exchange Option. At any time after a person or group of affiliated or
---------------
associated persons has become an Acquiring Person and before the acquisition by
a person or group of 50% or more of the outstanding Voting Shares, the Board of
Directors may, at its option, issue Common Shares (or Preferred Shares) in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
(or one one-thousandth of a Preferred Share) for each two Common Shares for
which each Right then outstanding is then exercisable, subject to adjustment.
Redemption of Rights. At any time prior to the time that a person or
--------------------
group has become an Acquiring Person, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of
$0.00001 per Right (the "Redemption Price"). The redemption of the Rights 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. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
No Rights as Stockholder. Until a Right is exercised, the holder
------------------------
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by the
-------------------
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person or group has become an Acquiring Person, no such amendment may
materially and adversely affect the interests of the holders of the Rights other
than the Acquiring Person and transferees of the Acquiring Person.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
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
October 24, 2001. A copy of the Rights Agreement is available free of charge
from the Company.
C-3
