Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. (ii) Subject to Section 24, in the event (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or (B) any Person (other than an Exempt Person), shall become an Acquiring Person, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder. (iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date. (b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 4 contracts
Sources: Shareholder Rights Agreement (Dh Apparel Co Inc), Shareholder Rights Agreement (Delta Apparel Inc), Shareholder Rights Agreement (Delta Woodside Industries Inc /Sc/)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt any Excluded Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 4.99% of the then-outstanding Common Stock. If a holder would, but for the immediately preceding sentence, be entitled to receive a number of shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of in excess of 4.99% of the then-outstanding Common Stock (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the current per share Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 4 contracts
Sources: Rights Agreement (Aikido Pharma Inc.), Rights Agreement (Xplore Technologies Corp), Rights Agreement (Active Power Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 3 contracts
Sources: Stockholder Rights Agreement (Galera Therapeutics, Inc.), Stockholder Rights Agreement (Veradigm Inc.), Stockholder Rights Agreement (Veradigm Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-arm's- length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter half shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are is authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common StStock
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Ryans Restaurant Group Inc), Shareholder Rights Agreement (Ryans Restaurant Group Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock of the Company payable in shares of Common StockStock of the Company, (B) subdivide the outstanding Common StockStock of the Company, (C) combine the outstanding Common Stock of the Company into a smaller number of shares shares, or (D) issue issue, change or alter any shares of its capital stock in a reclassification of the Common Stock or recapitalization (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on at such datetime, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date time at the Exercise Price then in effect and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company for such capital stock were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock of the Company for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall take such action as may be necessary to authorize additional shares of Common Stock of the Company for issuance upon exercise of the Rights. In the event that the Company shall, after good faith effort, be unable to take such actions as may be necessary to authorize such additional shares of Common Stock of the Company, the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"”), and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or other equity securities securities, if any, of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock which Preferred Stock that the Board of Directors of the Company has deemed determined to have the same value as shares of Common Stock of the Company (such shares or units of shares of preferred stock are equity securities being referred to herein called "Equivalent as “Common Stock"Stock Equivalents”)), to the extent permitted by the Company’s Certificate of Incorporation, (2) cash, (3) a reduction in the Exercise Price, (4) debt securities of the Company, (5) other assetsassets or securities of the Company, or (6) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event Event, and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(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 an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock of the Company entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase shares of Common Stock of the Company or Equivalent Common Stock Equivalents, or securities convertible into shares of Common Stock of the Company or Equivalent Common Stock Equivalents, at a price per share of Common Stock of the Company or per share of Equivalent Common Stock Equivalents (or having a conversion price per share, if a security convertible into Common Stock of the Company or Equivalent Common StockStock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Common Stock Company on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of shares of Common Stock which of the Company that the aggregate offering price of the total number of shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value, and the denominator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock of the Company owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock of the Company (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockStock of the Company, but including any dividend payable in stock other than Common StockStock of the Company) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Company on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one distributable in respect of a share of Common Stock of the Company, and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one share of Common StStock of the Company on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Common Stock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Washington Trust Bancorp Inc), Shareholder Rights Agreement (Washington Trust Bancorp Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 2 contracts
Sources: Rights Agreement (Gastar Exploration Inc.), Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Fairmarket Inc), Shareholder Rights Agreement (Fairmarket Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Digitas Inc), Shareholder Rights Agreement (NeuroMetrix, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.follows:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section the provisions of Sections 23 and 24, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have a right to receive, upon exercise of such thereof at a price per Right at equal to the then current Exercise Price multiplied by the number of one ten-thousandths of a share of Preferred Stock for which a Right is then exercisable (without giving effect to this Section 11(a)(ii)), in accordance with the terms of this AgreementAgreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was is then exercisable immediately prior (without giving effect to the first occurrence of a this Section 11(a)(ii)) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price current per share closing price of the Common Stock of the Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called of Common Stock of the Company being referred to as the "Adjustment Shares"); provided, however, that if in no event shall the transaction that would otherwise give rise consideration to be paid upon the foregoing adjustment is also subject to exercise of one Right be less than the provisions aggregate par value of Section 13 hereofthe shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, then only the provisions value of Section 13 such consideration shall apply be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and no adjustment shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock and Preferred Stock Equivalents owned by or held for the account of the Company or any Subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made pursuant to this Section 11(a)(ii). The Company successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which as a result of the consummation of such transaction, would substantially diminish or otherwise eliminate the benefits intended be adjusted to be afforded by the Rights. Notwithstanding anything Exercise Price which would then be in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any effect if such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or record date had 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 the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderbeen fixed.
(iii) In lieu of issuing any shares of Common Stock of the Company in accordance with Section 11(a)(ii), the Company, acting by or pursuant to a resolution of the Board of Directors, may, and in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company Company, acting by or pursuant to a resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a each Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ; and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common the Preferred Stock")), (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date: 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 exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock or Preferred Stock Equivalents, as applicable, outstanding on such record date, plus the number of shares of Common Preferred Stock or Preferred Stock Equivalents, as applicable, which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Shares of Common Preferred Stock or Preferred Stock Equivalents owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) per one ten-thousandth of a share of Preferred Stock (such calculation being made on an "as-converted basis"); provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as follows:
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Discovery Laboratories Inc /De/), Shareholder Rights Agreement (Discovery Laboratories Inc /De/)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as "Common Stock Equivalents")), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Avant Immunotherapeutics Inc), Shareholder Rights Agreement (Avant Immunotherapeutics Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 2 contracts
Sources: Stockholder Rights Agreement (Beacon Roofing Supply Inc), Tax Benefits Preservation Plan (Quotient Technology Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-hundredth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Stride Rite Corp), Shareholder Rights Agreement (Stride Rite Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide subdivides the outstanding Common StockPreferred Shares, (C) combine combines the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Share transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a "Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent"), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casethen promptly following that occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock Preferred Shares of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value (as defined herein) of one one-thousandth of a Preferred Share Market Price of the Common Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not enter into take any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments action which would eliminate or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to , provided that notwithstanding the contrary, from and after foregoing the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after Company may redeem the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a23(a)(ii), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Shares in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors, may, and if the number of shares of Common Stock Preferred Shares which are authorized by the Company's articles Amended Articles of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Share Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Preferred Shares, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any Preferred Shares issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day that period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall a Preferred Share will be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) of a Preferred Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Share Equivalent Common Stock shall will be deemed considered to equal have the Current Per same value as a Preferred Share Market Price of the Common Stock on such that date.
(b) If the Company shall fix fixes a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 calendar days after such that record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares ("Preferred Share Equivalents")) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Share Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such that record date, the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Per Share that Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible); provided, however, that but in no event shall will the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. In case such If the subscription price may be paid in a consideration part or all of which shall be is in a form other than cash, the value of such consideration shall will be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company shall will not be deemed considered outstanding for the purpose of any such computation. Such Those adjustments shall will be made successively whenever any such a record date is fixed; and in the event that if any such rights or warrants are not so issued, the Exercise Price shall will be adjusted to be the Exercise Price which that would then be in effect if such the applicable record date had not been fixed.
(c) If the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in capital stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of Common Stock one one-thousandth of a Preferred Share on such that record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be so distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereofof one one-thousandth of a Preferred Share, but in no event will the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the Right. Those adjustments will be made successively whenever any such record date is fixed, and if any such distribution is not so made, the Exercise Price will again be adjusted to be the Exercise Price that would be in effect if the applicable record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any Preferred Share, Common Share or any other share or any Right or other security or any other property will be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date will be the average of the daily closing prices per one share of Common Stsuch stock or per unit of such other security for the 30 consecutive Trading Days (as defined herein) immediately prior to such date; however, if the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value will be properly adjusted to take into account ex-dividend trading. The closing price for each day will be the last sale price, regular way, or, if no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date will be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors, but if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date will be determined by a nationally recognized investment banking firm selected by the Board of Directors, which determination will be described in a statement filed with the Rights Agent and will be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" means a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Morgans Foods Inc), Shareholder Rights Agreement (Morgans Foods Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date Close of this Agreement Business on March 30, 2007 (A) declare a dividend on the Common Stock of the Company payable in shares of Common StockStock of the Company, (B) subdivide the outstanding Common StockStock of the Company, (C) combine the outstanding Common Stock of the Company into a smaller number of shares shares, or (D) issue issue, change or alter any shares of its capital stock in a reclassification of the Common Stock or recapitalization (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on at such datetime, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date time at the Exercise Price then in effect and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company for such capital stock were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreementalone or together with its Affiliates and Associates, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets subsequent to the Company in exchange (in whole or in part) for shares Close of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the CompanyBusiness on March 30, with or without consideration2007, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock of the Company for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders vote of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company, acting by or pursuant to a vote of the Board of Directors of the Company, shall take such action as may be necessary to authorize additional shares of Common Stock of the Company for issuance upon exercise of the Rights. In the event that the Company shall, after good faith effort, be unable to take such actions as may be necessary to authorize such additional shares of Common Stock of the Company, the Company, acting by or pursuant to a vote of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or other equity securities securities, if any, of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock which Preferred Stock that the Board of Directors of the Company has deemed determined to have the same value as shares of Common Stock of the Company (such shares or units of shares of preferred stock are equity securities being referred to herein called as "Equivalent Common StockStock Equivalents")), to the extent permitted by the Company's Certificate of Incorporation, (2) cash, (3) a reduction in the Exercise Price, (4) debt securities of the Company, (5) other assetsassets or securities of the Company, or (6) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event Event, and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(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 an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock of the Company on such date.
(b) If If, subsequent to the Close of Business on March 30, 2007, the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock of the Company entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase shares of Common Stock of the Company or Equivalent Common Stock Equivalents, or securities convertible into shares of Common Stock of the Company or Equivalent Common Stock Equivalents, at a price per share of Common Stock of the Company or per share of Equivalent Common Stock Equivalents (or having a conversion price per share, if a security convertible into Common Stock of the Company or Equivalent Common StockStock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Common Stock Company on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of shares of Common Stock which of the Company that the aggregate offering price of the total number of shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value, and the denominator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock of the Company owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If the Company shall shall, subsequent to the Close of Business on March 30, 2007, fix a record date for the making of a distribution to all holders of Common Stock of the Company (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockStock of the Company, but including any dividend payable in stock other than Common StockStock of the Company) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Company on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one distributable in respect of a share of Common Stock of the Company, and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one share of Common StStock of the Company on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Common Stock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock, or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the thirty (30) Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Rogers Corp), Shareholder Rights Agreement (Rogers Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each which may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to this Section 11(a)(ii) hereof.
). (ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date 24 of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt Person), alone or together with its Affiliates and Associates, shall become an Acquiring Person, or
(C) during unless the event causing such time as there Person to become an Acquiring Person is an Acquiring Person, there shall be any reclassification acquisition of securities (including any reverse stock split), or recapitalization shares of Common Stock pursuant to a cash tender offer made pursuant to Section 14(d) of the CompanyExchange Act for all outstanding shares of Common Stock (other than shares of Voting Stock beneficially owned by the Person making the offer or by its Affiliates or Associates) at a price and on terms determined by at least a majority of the Board of Directors to be (a) at a price which is fair to stockholders (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or any merger or consolidation its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personstockholders, then, and except as otherwise provided in each such casethis Section 11, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a the right to receive, upon exercise of such Right at a price equal to the then current Exercise Price multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this AgreementAgreement and in lieu of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by 14
(xiii) multiplying the then current Exercise Price by the then number In lieu of one quarter shares of issuing Common Stock for which a Right was exercisable immediately prior to the first occurrence of a in accordance with Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) may, if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined determines that such action is part necessary or appropriate and not contrary to the interest of a planholders of Rights (and, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock which are authorized by the Company's articles Restated Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)Rights, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares Common Stock issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Sharessuch Common Stock, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stockcommon stock equivalents")), (4) debt securities of the Company, (5) other assets, 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 based upon of Directors of the advice of a competent investment banking firm selected by the BoardCompany; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) ), and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.15
(b) If In the event that the Company shall shall, after the Record Date, fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common shares having the same rights, privileges and preferences as the Preferred Stock ("equivalent preferred stock")) or securities convertible into Common Preferred Stock or Equivalent Common Stock equivalent preferred stock at a price per share of Common Preferred Stock or per share of Equivalent Common Stock equivalent preferred stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockequivalent preferred stock) less than the Current Per Share Fair Market Price Value per share of the Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common Stock and/or the equivalent preferred stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.16
(c) If In case the Company shall fix a record date for the making of a distribution to all holders of Common the Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of or evidences of indebtedness, cash indebtedness or assets (other than a regular periodic quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Preferred Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value per share of Common the Preferred Stock on such record date, less the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Value per share of the Preferred Stock; 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 exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement, the "Fair Market Value" of any share of Preferred Stock, Common Stock or any other stock or any Rights or other security or any other property on any date shall be determined as provided in this Section 11(d). In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as determined pursuant such term is hereinafter defined) immediately prior to Section 11(d) hereof) such date; provided, however, that in the event that the Fair Market Value per one share of Common Stany security is determined during a period which includes any date that is within 30 Trading Days after (i) the ex-dividend date for a dividend or distribution on such security payable in shares of such security or securities convertible into shares of such security, or (ii) the effective date of any subdivision, split, combination, consolidation, reverse stock split or reclassification of such security, then, and in 17
Appears in 2 contracts
Sources: Rights Agreement (Medimmune Inc /De), Rights Agreement (Medimmune Inc /De)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), shall Section 7(e) hereof) thereafter have a has the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 2 contracts
Sources: Rights Agreement (Freds Inc), Rights Agreement (Freds Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to resolution of the Board of Directors, may, and in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver delive r value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(iiSection
(a) Adjustment (ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the American Stock Exchange or, if the securities are not listed or admitted to trading on the American Stock Exchange, as reported in the principal consolidated transaction reporting
Appears in 2 contracts
Sources: Shareholder Rights Agreement (Shelbourne Properties Ii Inc), Shareholder Rights Agreement (Shelbourne Properties Iii Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt any Excluded Person), shall become alone or together with its Related Persons, becomes an Acquiring PersonPerson (the first occurrence of such event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitthe “Flip-In Event”), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) Agreement by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive unless the Board of Directors in its sole discretion expressly permits, Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 4.95% of the then-outstanding Common Stock. In like manner, in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights of more than 4.95% of the outstanding common stock on the date of this Agreement together with such holder’s Affiliates and Associates shall be entitled to receive, unless the Board of Directors in its sole discretion expressly permits, Common Stock (or other shares of capital stock of the Company) that would result in such holder together with such holder’s Affiliates and Associates, , increasing its ownership above its current level. If a holder would, but for either of the immediately preceding two sentences, be entitled to receive a number of shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of in excess of 4.95% or such Beneficial Owner’s current ownership exceeding its current ownership, as the case may be, of the then-outstanding Common Stock (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash representing that portion of the Exercise Price paid for the Excess Shares not received by such person. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Rights Agreement (Tengasco Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), shall Section 7(e) hereof) thereafter have a has the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-hundredths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Staccordance
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or equity securities, if any, of the Company other equity securities than Common Stock of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4) Preferred Stock Equivalents which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices
Appears in 1 contract
Sources: Shareholder Rights Agreement (Boston Properties Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are quoted by any such organization, the average of the closing bid and asked price
Appears in 1 contract
Sources: Shareholder Rights Agreement (Anika Therapeutics Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt any Excluded Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 4.95% of the then-outstanding Common Stock. If a holder would, but for the immediately preceding sentence, be entitled to receive a number of shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of in excess of 4.95% of the then-outstanding Common Stock (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the current per share Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St,
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide subdivides the outstanding Common StockPreferred Shares, (C) combine combines the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Share transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a “Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casethen promptly following that occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock Preferred Shares of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value (as defined herein) of one one-thousandth of a Preferred Share Market Price of the Common Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Shares in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors, may, and if the number of shares of Common Stock Preferred Shares which are authorized by the Company's articles ’s Second Amended and Restated Articles of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Share Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Preferred Shares, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any Preferred Shares issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day that period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall a Preferred Share will be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) of a Preferred Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Share Equivalent Common Stock shall will be deemed considered to equal have the Current Per same value as a Preferred Share Market Price of the Common Stock on such that date.
(b) If the Company shall fix fixes a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 calendar days after such that record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares (“Preferred Share Equivalents”)) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Share Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such that record date, the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Per Share that Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible); provided, however, that but in no event shall will the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. In case such If the subscription price may be paid in a consideration part or all of which shall be is in a form other than cash, the value of such consideration shall will be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company shall will not be deemed considered outstanding for the purpose of any such computation. Such Those adjustments shall will be made successively whenever any such a record date is fixed; and in the event that if any such rights or warrants are not so issued, the Exercise Price shall will be adjusted to be the Exercise Price which that would then be in effect if such the applicable record date had not been fixed.
(c) If the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in capital stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of Common Stock one one-thousandth of a Preferred Share on such that record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be so distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereofof one one-thousandth of a Preferred Share, but in no event will the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the Right. Those adjustments will be made successively whenever any such record date is fixed, and if any such distribution is not so made, the Exercise Price will again be adjusted to be the Exercise Price that would be in effect if the applicable record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any Preferred Share, Common Share or any other share or any Right or other security or any other property will be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date will be the average of the daily closing prices per one share of Common Stsuch stock or per unit of such other security for the 30 consecutive Trading Days (as defined herein) immediately prior to such date; however, if the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value will be properly adjusted to take into account ex-dividend trading. The closing price for each day will be the last sale price, regular way, or, if no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by such market or other system then in use; or, if on any such date no bids for such security are 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 on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date will be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors, but if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date will be determined by a nationally recognized investment banking firm selected by the Board of Directors, which determination will be described in a statement filed with the Rights Agent and will be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” means a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Associated Estates Realty Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-hundredth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to resolution of the Board of Directors, may, and in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-hundredth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex- dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time Company, acting by resolution of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stof
Appears in 1 contract
Sources: Shareholder Rights Agreement (Interstate Hotels Management Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty- five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex- dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are quoted by any such organization, the average of the closing bid and asked pri
Appears in 1 contract
Sources: Shareholder Rights Agreement (Anika Therapeutics Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each which may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (Aw) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (Bx) subdivide the outstanding Common Preferred Stock, (Cy) combine the outstanding Common Preferred Stock into a smaller number of shares of Preferred Stock or (Dz) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to this Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date 24 of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt Person), alone or together with its Affiliates and Associates, shall become an Acquiring Person, or
(C) during unless the event causing such time as there Person to become an Acquiring Person is an Acquiring Person, there shall be any reclassification acquisition of securities (including any reverse stock split), or recapitalization shares of Common Stock pursuant to a cash tender offer made pursuant to Section 14(d) of the CompanyExchange Act for all outstanding shares of Common Stock (other than shares of Voting Stock beneficially owned by the Person making the offer or by its Affiliates or Associates) at a price and on terms determined by at least a majority of the Continuing Directors to be (a) at a price which is fair to stockholders (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or any merger or consolidation its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personstockholders, then, and except as otherwise provided in each such casethis Section 11, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a the right to receive, upon exercise of such Right at a price equal to the then current Exercise Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this AgreementAgreement and n lieu of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value of the Company's Common Stock (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares")event; provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction .
(iii) In lieu of the kind listed issuing Common Stock in this accordance with Section 11(a)(ii) hereof, the Company may, if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined Company, upon approval by a majority of the Continuing Directors, determines that such action is part necessary or appropriate and not contrary to the interest of a planholders of Rights (and, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock which are authorized by the Company's articles Restated Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)Rights, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares Common Stock issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Sharessuch Common Stock, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board of Directors of the Company, upon approval by a majority of the Continuing Directors, has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stockcommon stock equivalents")), (4) debt securities of the Company, (5) other assets, 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 based of Directors of the Company, upon approval by a majority of the advice of a competent investment banking firm selected by the BoardContinuing Directors; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) ), and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors, upon approval by a majority of the Continuing Directors, shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the occurrence of an event described in Section 11(a)(ii) Adjustment Date), in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period")shares. To the extent that the Company determines that some action need be taken pursuant to the first or second sentence preceding sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 any such period, as extended, in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For effect and shall promptly notify the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value Rights Agent of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stsuspen-
Appears in 1 contract
Sources: Rights Agreement (Sonic Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the any outstanding shares of Common Stock payable in shares of Common Stock, (B) subdivide the subdivides any outstanding shares of Common Stock, (C) combine the combines any outstanding shares of Common Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 2425, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then current Exercise Price in accordance with the terms of this Agreement, in lieu of the number of shares of Common Stock otherwise receivable upon exercise, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law, the Charter and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law and the Charter, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of preferred stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such shareholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Common Stock (“Equivalent Common Stock Stock”)) or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock and/or Equivalent Common Stock outstanding on such record date, plus the number of shares of Common Stock and/or Equivalent Common Stock which the aggregate offering price of the total number of shares of Common Stock or and/or Equivalent Common Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Stock and/or Equivalent Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or and/or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Stock and Equivalent Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Stock and the denominator of which shall be the such Current Per Share Market Price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Snow Lake Resources Ltd.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common StFair Market
Appears in 1 contract
Sources: Shareholder Rights Agreement (Avant Immunotherapeutics Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stof
Appears in 1 contract
Sources: Shareholder Rights Agreement (Summit Properties Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than 45% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)). If a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of in excess of 45% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)) (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Rights Agreement (Nuverra Environmental Solutions, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the any outstanding shares of Common Stock payable in shares of Common Stock, (B) subdivide the subdivides any outstanding shares of Common Stock, (C) combine the combines any outstanding shares of Common Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then current Exercise Price in accordance with the terms of this Agreement, in lieu of the number of shares of Common Stock otherwise receivable upon exercise, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law, the Charter and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law and the Charter, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of preferred stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such shareholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Common Stock (“Equivalent Common Stock Stock”)) or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock and/or Equivalent Common Stock outstanding on such record date, plus the number of shares of Common Stock and/or Equivalent Common Stock which the aggregate offering price of the total number of shares of Common Stock or and/or Equivalent Common Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Stock and/or Equivalent Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or and/or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Stock and Equivalent Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Stock and the denominator of which shall be the such Current Per Share Market Price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, 20 subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except 21 as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 22 sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall 23 be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-
Appears in 1 contract
Sources: Shareholder Rights Agreement (Brooktrout Technology Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, ; or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation Directors of the Company shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or together with any its Affiliates and Associates, has become the Beneficial Owner of its Subsidiaries 10% or any other more of the outstanding shares of Common Stock and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock beneficially owned by such Person or to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company or any and its shareholders, but for the actions and possible actions of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company; provided, however, that the Board of Directors of the Company may not declare a Person to be an Adverse Person if, prior to the time that such Person acquired 10% or more of the shares of Common Stock then outstanding, such Person provided to the Board of Directors in writing a statement of such Person's purpose and intentions in connection with the proposed acquisition of Common Stock, together with any other information reasonably requested of such Person by the Board of Directors, and the Board of Directors, based on such statement and reasonable inquiry and investigation, including such consultation, if any, with such persons as the directors shall deem appropriate, determines to notify and notifies such Person in writing that it will not declare such Person to be an Adverse Person; provided further, that the Board of Directors may expressly condition in any manner a determination not to declare a Person an Adverse Person on such conditions as the Board of Directors may select, including without limitation, such Person's not acquiring more than a specified amount of stock and/or on such Person's not taking actions inconsistent with the purposes and intentions disclosed by such Person in the statement provided to the Board of Directors. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such persons as the directors shall deem appropriate, that such Person has not met or complied with any condition specified by the Board of Directors, the Board of Directors may at any time thereafter declare such Person to be an Adverse Person pursuant to the provisions of this Section 11(a)(ii)(B); then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-hundredth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of there shall not be sufficient Treasury shares or authorized but unissued shares of Common Preferred Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall: (A) determine the excess shall take all action as may be necessary to authorize and reserve for issuance such number of (1) the value additional shares of the Adjustment Shares issuable Preferred Stock as may from time to time be required to be issued upon the exercise in full of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and thenall Rights outstanding and, if necessary, cash, which shares or cash have an aggregate value equal shall use its best efforts to obtain shareholder approval thereof. Notwithstanding the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence foregoing provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to in lieu of issuing shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, if a majority of the Disinterested Directors then in office determines that such action shall apply uniformly is necessary or appropriate and is not contrary to all outstanding the interests of the holders of the Rights, they may elect to cause the Company to pay, and (y) may suspend if sufficient shares of Preferred Stock cannot be issued for such purpose in accordance with the exercisability of the Rights until the expiration of the Substitution Period in order to seek an 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 suspensionprovisions hereof, the Company shall issue a public announcement stating that or pay upon the exercisability exercise of the Rights has been temporarily suspendedRights, as well as a public announcement at such time as cash, property, debt securities, shares of Preferred Stock or Common Stock, or any combination thereof, having an aggregate Fair Market Value equal to the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Fair Market Price Value of the Common shares of Preferred Stock which otherwise would have been issuable pursuant to Section 11(a)(ii). Any such election by a majority of the Disinterested Directors of the Company must be made and publicly announced within 30 days of the date on the which any Section 11(a)(ii) Adjustment Event first occurs following the Stock Acquisition Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same rights, privileges and preferences as the shares of Preferred Stock ("preferred stock equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Stock preferred stock equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Stock preferred stock equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockpreferred stock equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Preferred Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and preferred stock equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-hundredth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex- dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii11(a) (iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stand
Appears in 1 contract
Sources: Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide splits or subdivides the outstanding Common Stock, (C) combine combines the outstanding Common Stock into a smaller number of shares shares, or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, then the Exercise 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 Units of a share of Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares Units of a share of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2424 hereof, in the event
(A) event any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise of such Right thereof, at a price equal to (A) the then then-current Exercise Price for a Unit of a share of Common Stock, multiplied by (B) ten thousand, multiplied by (C) the number of Units of a Common Share for which a Right is then exercisable in accordance with the terms of this Agreement, in lieu of the number of Units of Common Stock otherwise receivable upon exercise, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying (A) the then then-current Exercise Price for a Unit of a share of Common Stock by (B) ten thousand, multiplied by (C) the then number of one quarter shares Units of a share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-In Event and and, dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of the Triggering Percentage or more of the shares of Common Stock then-outstanding (or, in the case of an Existing Holder, becoming the Beneficial Owner of one or more additional shares of Common Stock). If a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of the Triggering Percentage or more of the shares of Common Stock then-outstanding (or, in the case of an Existing Holder, becoming the Beneficial Owner of one or more additional shares of Common Stock) (such shares, the “Excess Shares”), then, the Board may elect, in its sole discretion, that in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will be entitled to receive only an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine (9) months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which that are authorized by the Company's articles Articles of organization Incorporation, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)) hereof, the Board shall, to the extent permitted by applicable law, the Articles of Incorporation and by any agreements or instruments then in effect to which the Company shall: is a party (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-In Trigger Date"”), then the Company shall be obligated to deliver, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the Stock Acquisition Date (and remaining in effect) to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, Common Stock or other equity securities of the Company, debt securities of the Company, other assets, or any combination thereof, which shares or cash have an aggregate value equal to the Spread. If If, upon the occurrence of the Flip-In Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then if the Board so elects, the thirty (30) calendar day period set forth above may be extended to the extent necessary, but not more than ninety one hundred and twenty (90120) calendar days after the Section 11(a)(ii) Adjustment Flip-In Trigger Date, in order so that the Company may seek stockholder approval for the authorization of such additional shares of Common Stock (such thirty (30) day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first or second sentence preceding provisions of this Section 11(a)(iii), the Company (xaa) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (ybb) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first the second sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-In Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Common Stock (“Equivalent Common Stock Stock”)) or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or and/or Equivalent Common Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or and/or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration all or part or all of which shall may be in a form other than cash, the value of such consideration shall be determined by the Current Per Share Market Price thereof determined Board, whose determination shall be described in accordance a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Stock owned by or held for the account of the Company shall will not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which that would then be have been in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b) hereof)), then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such record date, less minus the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Stock and the denominator of which shall be the such Current Per Share Market Price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii) hereof, the “Current Market Price” per share of common stock (or similar equity interest) of an issuer on any date shall be deemed to be the average of the daily closing prices per one share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the “Current Market Price” per share of Common StStock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights), or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. The closing price per share of common stock (or other security) of an issuer for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on NYSE or NASDAQ or, if such shares of common stock (or other security) are not listed or admitted to trading on NYSE or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exc
Appears in 1 contract
Sources: Rights Agreement (Farmers & Merchants Bancshares, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares of stock covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide subdivides the outstanding Common Preferred Stock, (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares of stock, or (D) issue issues any shares of its capital stock Capital Stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a "Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent"), (3) shall sellthen promptly following that occurrence, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this AgreementPrice, such number of shares of Common Preferred Stock of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value (as defined herein) of the Common one one-thousandth of a share of Preferred Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called of stock being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Stock in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors may, and if the number of shares of Common Preferred Stock which are authorized by the Company's articles Amended and Restated Certificate of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Preferred Stock")), (4) debt securities of the Company, (5) other assetsassets of the Company, or (6) any combination of the foregoingforegoing which, having when added to any Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares of stock (such thirty (30) day that period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will 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 an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common StPreferred
Appears in 1 contract
Sources: Stockholder Rights Agreement (Captec Net Lease Realty Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on the Common Stock Shares payable in shares of Common StockShares, (B) subdivide or split the outstanding Common StockShares into a greater number of shares, (C) combine or consolidate the outstanding Common Stock Shares into a smaller number of shares or effect a reverse stock split, or (D) issue any shares of its capital stock in a reclassification of the Common Stock Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then) or division, except as otherwise provided in this Section 11(a)) and in Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, split, consolidation, division, combination or reclassification, and the number and kind of shares of Common Stock or capital stock, as the case may be, issuable on such date, reclassification shall be proportionately adjusted so that the holder of any Right Rights exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of Common Shares or shares of Common Stock or capital stock, as the case may be, which, if such Right Rights had been exercised immediately prior to such record or effective date and at a time when the Common Stock Shares (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned acquired upon such exercise and and, in addition, would have been entitled to receive with respect to such Common Shares or shares of capital stock, as the case may be, by virtue of such dividend, subdivision, split, consolidation, combination or reclassification; providedreclassification at an aggregate Exercise Price (i.e., howeverthe product of the number of Common Shares or shares of capital stock purchased or exercised, that in no event shall as the consideration case may be, multiplied by the Exercise Price) equal to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereofExercise Price prior to such dividend, the adjustment provided for in this Section 11(a)(i) shall be in addition tosubdivision, and shall be made prior tosplit, any adjustment required pursuant to Section 11(a)(ii) hereofconsolidation, combination, division or reclassification.
(ii) Subject to Section 24Sections 11(a)(iii) and 25 hereof, in the event
(A) event that any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that each holder of a one Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such each Right at and upon payment of the then then-current Exercise Price for one Common Share, in accordance with the terms of this Agreement, not one Common Share, but rather such number of shares of Common Stock of the Company Shares as shall equal the result obtained by (x) multiplying the then then-current Exercise Price by the then number of one quarter shares of Common Stock Shares for which a one Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock current market price (determined pursuant to Section 11(d)) hereof) per Common Share on the date such Person, alone or together with its Affiliates and Associates, became an Acquiring Person. For example, assuming the current market price of the occurrence Common Shares is $4.00 per share and assuming no other adjustments are required under the terms of this Agreement, after any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of becomes an Acquiring Person, (ii) a transferee holder of an Acquiring Person (or one Right upon exercise thereof and payment of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior $20.00 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 the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(ashall receive ten (10) Common Shares (($20.00 X 1)/(.5 X $4.00), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder).
(iii) In Subject to Section 25 hereof, in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles of organization incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing subparagraph (ii), the Company shall: (ARights shall not be exercisable for Common Shares, but proper provision shall be made so that each holder of one Right, except as provided in section 7(e) determine the excess of (1) the value of the Adjustment Shares issuable hereof, shall thereafter have a right to receive, upon the exercise of a each Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Priceprice for one Common Share determined pursuant to subparagraph (ii), (1) cashnot one Common Share, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares but rather such number of Common Stock Equivalents (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))or, (4) debt securities in the judgment of the CompanyBoard of Directors, (5) other assets, or (6) any such combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to Equivalents and Common Shares) as shall equal the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares number of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken Shares determined pursuant to the first or second sentence of this Section 11(a)(iiisubparagraph (ii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If b. In case the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock Shares or securities convertible into Common Stock or Equivalent Common Stock Shares at a price per share of Common Stock or per share of Equivalent Common Stock Share (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common StockShares) less than the Current Per Share Market Price current market price (as determined pursuant to Section 11(d) hereof) of the per Common Stock Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock Shares outstanding on such record date, plus the number of shares of Common Stock Shares which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock Shares so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price current market price and the denominator of which shall be the number of shares of Common Stock Shares outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding and conclusive for all purposes. Common Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If c. In case the Company shall fix a record date for the making of a distribution to all holders of Common Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic quarterly cash dividend out of the earnings or retained earnings of the Companydividend), assets assets, stock (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common StockShares) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in or excluded pursuant to Section 11(b)) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price current market price (as determined pursuant to Section 11(d) hereof) per one Common Share on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding and conclusive for all purposes) of the portion of the cash, assets, stock or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one Common Share and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per one Common Share. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
d. For the Purposes of any computation hereunder, the "current market price" per Common Share on any date shall be deemed to be the average of the daily closing prices per Common Share for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current market price per Common Share is determined during a period following the announcement by the issuer of such Common Shares of (i) a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights) or (ii) any subdivision, split, consolidation, combination or reclassification of such Common Shares and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, split, consolidation, division, combination or reclassification, then, and in each such case, the "current market price" shall be appropriately adjusted at the discretion of the Board of Directors of the Company to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the Common Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Shares, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used and shall be binding and conclusive for all purposes. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Common Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Shares are not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board of Common StDirectors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding and conclusive for all purposes.
Appears in 1 contract
Sources: Rights Agreement (Primesource Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares shares, or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Common Stock of the Company in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to a resolution of the Board of Directors, may, and in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles of organization ’s Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of preferred stock, such as the Preferred Stock, that the Board of Directors has determined to have the same value as shares of Common Stock of the Company (such shares of preferred stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are 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 on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors; provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Tax Benefits Preservation Rights Agreement (Sed International Holdings Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock of the Company payable in shares of Common StockStock of the Company, (B) subdivide the outstanding Common StockStock of the Company, (C) combine the outstanding Common Stock of the Company into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification of the Common Stock or recapitalization (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on at such datetime, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date time at the Exercise Price then in effect and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company for such capital stock were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock of the Company for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall take such action as may be necessary to authorize additional shares of Common Stock of the Company for issuance upon exercise of the Rights. In the event that the Company shall, after good faith effort, be unable to take such actions as may be necessary to authorize such additional shares of Common Stock of the Company, the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or other equity securities securities, if any, of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock which Preferred Stock that the Board of Directors of the Company has deemed determined to have the same value as shares of Common Stock of the Company (such shares or units of shares of preferred stock are equity securities being referred to herein called as "Equivalent Common StockStock Equivalents")), to the extent permitted by the Company's Certificate of Incorporation, (2) cash, (3) a reduction in the Exercise Price, (4) debt securities of the Company, (5) other assets, assets or securities of the Company or (6) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock of the Company entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase shares of Common Stock of the Company or Equivalent Common Stock Equivalents, or securities convertible into shares of Common Stock of the Company or Equivalent Common Stock Equivalents, at a price per share of Common Stock of the Company or per share of Equivalent Common Stock Equivalents (or having a conversion price per share, if a security convertible into Common Stock of the Company or Equivalent Common StockStock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Common Company Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of shares of Common Stock which of the Company that the aggregate offering price of the total number of shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value, and the denominator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock of the Company owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock of the Company (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockStock of the Company, but including any dividend payable in stock other than Common StockStock of the Company) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Company on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one distributable in respect of a share of Common Stock of the Company, and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one share of Common StStock of the Company on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Common Stock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each which may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement (Aw) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (Bx) subdivide the outstanding Common Preferred Stock, (Cy) combine the outstanding Common Preferred Stock into a smaller number of shares of Preferred Stock or (Dz) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Sources: Rights Agreement (Zymetx Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible”); provided, however, that in connection with any exercise effected pursuant to this Section 11(a)(ii), no event holder of Rights shall the consideration be entitled to be paid upon the exercise receive Common Stock (or other shares of one Right be less than the aggregate par value capital stock of the shares Company) that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than 4.95% of the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of then-outstanding Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and (or, in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 case of a distribution to all holders Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) other shares of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings capital stock of the Company), assets ). If (other than x) a dividend payable in Common Stockholder would, but including any dividend payable for the proviso in stock other than Common Stock) or optionsthe immediately preceding sentence, subscription rights or warrants (excluding those referred be entitled to receive upon exercise of a Right a number of shares that would otherwise result in Section 11(b))such holder, together with such holder’s Related Persons, becoming the Exercise Price to be Beneficial Owner of in effect after such record date shall be determined by multiplying excess of 4.95% of the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of then-outstanding Common Stock on such record date(or, less in the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) case of a Grandfathered Person, becoming the portion Beneficial Owner of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one an additional share of Common Stock and (or other shares of capital stock of the denominator of which shall be Company)) (such shares, the Current Per Share Market Price (as determined pursuant to Section 11(d“Excess Shares”) hereof) per one share of Common Stand
Appears in 1 contract
Sources: Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii). The Company , no holder of Rights shall not enter into any transaction be entitled to receive Common Stock (or other shares of capital stock of the kind listed Company) that would result in this Section 11(a)(iisuch holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than (1) if at 4.95% of the time then-outstanding Common Stock or (2) 4.95% (by value) of such transaction there are any rightsthe then- outstanding Company Stock (or, warrantsin the case of a Grandfathered Person, instruments becoming the Beneficial Owner of one or securities outstanding more additional shares of Common Stock (or any agreements one or arrangements which more other shares of capital stock of the Company) other than as a result of the consummation acquisition of such transaction, would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. Notwithstanding anything in this Agreement Beneficial Ownership of shares of Company Stock pursuant to the contraryConvertible Notes or the Warrants). If (x) a holder would, from and after but for the first occurrence proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) Right a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value 4.95% of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over then- outstanding Common Stock or (2) 4.95% (by value) of the Exercise Price then-outstanding Company Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of one or more additional shares of Common Stock (or one or more other shares of capital stock of the Company) other than as a result of the acquisition of Beneficial Ownership of shares of Company Stock pursuant to the Convertible Notes or the Warrants) (such excess is herein called shares, the "Spread"), “Excess Shares”) and (By) with respect the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares would jeopardize or endanger the value or availability to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment Company of the Tax Benefits or the Board otherwise determines, in its sole discretion, that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable Exercise Priceto the Company, such holder will only be entitled to receive an amount, at the election of the Company, in (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St,
Appears in 1 contract
Sources: Tax Benefits Preservation Plan
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares shares, or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24the provisions of Sections 23 and 24 hereof, in the eventevent that:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)) alone or together with its Affiliates and Associates, shall become an Acquiring Person, ; or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, or by majority vote, shall declare any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving Person to be an Acquiring Adverse Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, ; then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph Section 7 (ii)e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company (or, in the discretion of the Board of Directors, Common Stock) as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandth of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of there shall not be sufficient authorized but unissued shares of Common Preferred Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.the
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("preferred stock equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Stock preferred stock equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Stock preferred stock equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockpreferred stock equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d11 (d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Preferred Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and preferred stock equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no such event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d11 (d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the American Stock Exchange or, if the securities are not listed or admitted to trading on the American 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked
(ii) If the Preferred Stock is not publicly held or not so listed or traded in the manner described in clause (i) but the Common Stock is so listed or traded, then the "Fair Market Value" of a share of the Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for events such as stock splits, stock dividends and recapitalizations with respect to the Common Stock after the date of this Agreement) multiplied by the Fair Market Value of a share of the Common Stock.
(iii) If neither the Preferred Stock or Common Stock is publicly held or not so listed or traded, "Fair Market Value" shall mean the fair value per share of stock or per other unit of such security, determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company; provided, however, that if at the time of such determination there is an Acquiring Person or an Adverse Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
Appears in 1 contract
Sources: Shareholder Rights Agreement (American Science & Engineering Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision,
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip- In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than 4.95% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)). If (x) a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of in excess of 4.95% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)) (such shares, the “Excess Shares”) and (y) the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares would jeopardize or endanger the value or availability to the Company of the Tax Benefits or the Board otherwise determines, in its sole discretion, that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with prompt written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Tax Benefits Preservation Plan (Universal Stainless & Alloy Products Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable (if the Rights had been exercisable) as of a time immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Class A Common Stock, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Class A Common Stock")), (45) debt securities of the Company, (56) other assets, assets of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30-Trading Day period after the ex- dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Interstate Hotels Co)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each which may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date 24 of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt Person), alone or together with its Affiliates and Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and except as otherwise provided in each such casethis Section 11, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a the right to receive, receive upon exercise of such Right at a price equal to the then current Exercise Price multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this AgreementAgreement and in lieu of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value of the Company’s Common Stock (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares")event; provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction .
(iii) In lieu of the kind listed issuing Common Stock in this accordance with Section 11(a)(ii) hereof, the Company may, if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined determines that such action is part necessary or appropriate and not contrary to the interest of a planholders of Rights (and, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock which are authorized by the Company's articles of organization ’s Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)Rights, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares Common Stock issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Sharessuch Common Stock, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"“common stock equivalents”)), (4) debt securities of the Company, (5) other assets, 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 based upon of Directors of the advice of a competent investment banking firm selected by the BoardCompany; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) ), and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the occurrence of an event described in Section 11(a)(ii) Adjustment Date), in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period")shares. To the extent that the Company determines that some action need be taken pursuant to the first or second sentence preceding sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 any such period, as extended, in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence this Section 11(a)(iii) and to determine the value thereof. In thereof in the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect and shall promptly notify the Rights Agent of such suspension. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock at the Close of Business on the date of the occurrence of one of the events described in Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock “common stock equivalent” shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock stock on such date.
(b) If In the event that the Company shall shall, after the Record Date, fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common shares having the same rights, privileges and preferences as the Preferred Stock (“equivalent preferred stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Stock equivalent preferred stock at a price per share of Common Preferred Stock or per share of Equivalent Common Stock equivalent preferred stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockequivalent preferred stock) less than the Current Per Share Fair Market Price Value per share of the Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common Stock and/or the equivalent preferred stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the exercise thereofof one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix a record date for the making of a distribution to all holders of Common the Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of or evidences of indebtedness, cash indebtedness or assets (other than a regular periodic quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Preferred Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value per share of Common the Preferred Stock on such record date, less the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Value per share of the Preferred Stock; 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 exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement, the “Fair Market Value” of any share of Preferred Stock, Common Stock or any other stock or any Rights or other security or any other property on any date shall be determined as provided in this Section 11(d). In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any security is determined pursuant during a period which includes any date that is within 30 Trading Days after (i) the ex-dividend date for a dividend or distribution on such security payable in shares of such security or securities convertible into Shares of such security, or (ii) the effective date of any subdivision, split, combination, consolidation, reverse stock split or reclassification of such security, then, and in each such case, the Fair Market Value shall be appropriately adjusted by the Board of Directors of the Company to Section 11(dtake into account ex-dividend or post-effective date trading. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way (in either case, as reported in the applicable transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange), or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the applicable 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the high bid and low asked prices) hereof) in the over-the-counter market, as reported by the NASDAQ Stock Market or such other system then in use; or, if no bids for such security are 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 of the Company. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day. If a security is not publicly held or not so listed or traded, “Fair Market Value” shall mean the fair value per one share of stock or per other unit of such other security, as determined in good faith by the Board of Directors of the Company; provided, however, that, if the Preferred Stock is not publicly traded, the Fair Market Value of a share of Preferred Stock shall be conclusively deemed to be the Fair Market Value of a share of Common StStock (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. In the case of property other than securities, the “Fair Market Value” thereof shall be determined in good faith by the Board of Directors of the Company. Any such determination of Fair Market Value shall be described in a statement filed with the Rights Agent and shall be binding upon the Rights Agent and the holders of the Rights.
Appears in 1 contract
Sources: Rights Agreement (Saks Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The NASDAQ Stock Market or the New York Stock Exchange or, if the securities are not listed or admitted to trading on The NASDAQ Stock Market or 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Harvard Apparatus Regenerative Technology, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide subdivides the outstanding Common Stock, (C) combine combines the outstanding Common Stock into a smaller number of shares shares, or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, then the Exercise 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2424 hereof, in the event
(A) event any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of the number of shares of Common Stock otherwise receivable upon exercise, such number of shares of Common Stock of the Company as shall equal the result obtained by by
(xA) multiplying the then then-current Exercise Price for a whole share of Common Stock by the then number of one quarter shares halves of a share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-In Event and (yB) dividing that product (which, following such first occurrence, Flip-In Event shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii11(a) (ii), no holder of Rights shall be entitled to receive Common Stock that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of 10% or more of the shares of Common Stock then-outstanding (or, in the case of an Existing Holder, becoming the Beneficial Owner of one or more additional shares of Common Stock). If a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of 10% or more of the shares of Common Stock then-outstanding (or, in the case of an Existing Holder, becoming the Beneficial Owner of one or more additional shares of Common Stock) (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will be entitled to receive only an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which that are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)) hereof, the Board shall, to the extent permitted by applicable law, the Charter and by any agreements or instruments then in effect to which the Company shall: is a party (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-In Trigger Date"”), then the Company shall be obligated to deliver, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the Stock Acquisition Date (and remaining in effect) to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, Common Stock or other equity securities of the Company, debt securities of the Company, other assets, or any combination thereof, which shares or cash have an aggregate value equal to the Spread. If If, upon the occurrence of the Flip-In Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then if the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii)Board so elects, the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stthirty
Appears in 1 contract
Sources: Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt any Excluded Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 4.9% of the then-outstanding Common Stock. If a holder would, but for the immediately preceding sentence, be entitled to receive a number of shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of in excess of 4.9% of the then-outstanding Common Stock (such shares, the “Excess Shares”), then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the current per share Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stin
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter one-fifteenth shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 5036% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Sources: Shareholder Rights Agreement (One Price Clothing Stores Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreementalone or together with its Related Persons, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become becomes an Acquiring Person, or
(C) during unless the event causing such time as there is Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof (the first occurrence of such event, there shall be any reclassification of securities (including any reverse stock splitthe “Flip-In Event”), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 18% of the then outstanding Common Stock. If (x) a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial Owner of in excess of 18% of the then outstanding Common Stock (such shares, the “Excess Shares”) and (y) the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the current per share Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party,
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and and
(B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in In the event
(A) event that any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during or an Adverse Person, unless the event causing such time as there is Person to become an Acquiring Person, there shall be any reclassification or an Adverse Person, is a transaction set forth in Section 13(a) hereof or is an acquisition of securities shares of Common Stock pursuant to a cash tender offer made pursuant to Section 14(d) of the Exchange Act for all outstanding shares of Common Stock (including any reverse stock split), other than shares of Common Stock beneficially owned by the Person making the offer or recapitalization by its affiliates or associates) at a price and on terms determined by at least a majority of the Continuing Directors who are not employees of the Company, after receiving advice from one or any merger more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such members of the Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or consolidation its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casestockholders, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which that are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon the exercise of the Rights is shall not be sufficient to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall: shall (A) determine the excess of (1) the value Fair Market Value, as determined in accordance with Section 11(d) hereof as of the Section 11(a) Trigger Date (as such term is defined below), of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock or other securities which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of or shares of preferred stock are herein called "Equivalent Common Stockcommon stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value a Fair Market Value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value the Current Value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii11(a) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value Fair Market Value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii11(a) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(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 an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock common stock equivalents or securities convertible into Common Stock or Equivalent Common Stock common stock equivalents at a price per share of Common Stock or per share of Equivalent Common Stock common stock equivalents (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stockcommon stock equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock and common stock equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one share of Common StStock on such record date. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Common Stock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, provided, however, that in the event that the Fair Market Value per share of any share of Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (x) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock or (y) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, including, if at the time of such determination there is an Acquiring Person or an Adverse Person, a majority of the Continuing Directors then in office, or if there are no Continuing Directors, by a nationally recognized investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Aquila Biopharmaceuticals Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(ia) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(iii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iiiii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both Section this Section 11(a)(i) and Section Section 11(a)(ii) hereof), the adjustment provided for in this Section Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Class A Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Class A Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Class A Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Class A Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Class A Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Class A Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Class A Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Class A Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Class A Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d) hereof) 11(a)(iii), the “Current Market Price” per one share of common stock (or similar equity interest) of an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per share of Class A Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Class A Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Sources: Stockholder Rights Agreement (Purple Innovation, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following
Appears in 1 contract
Sources: Shareholder Rights Agreement (Summit Properties Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend or bonus issue on the Common Stock Preference Shares payable in shares of Common StockPreference Shares, (B) subdivide the outstanding Common StockPreference Shares, (C) combine or consolidate the outstanding Common Stock Preference Shares into a smaller number of shares or (D) issue any shares of its capital stock shares in a reclassification of the Common Stock Preference Shares (including any such reclassification in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or bonus issue or of the effective date of such subdivision, combination combination, consolidations or reclassification, and the number and kind of shares of Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books Preference Share register of the Company were is open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24, hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote of all Directors, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of l0% or consolidation more of the outstanding Common Shares and (y) a deter- mination by the Board of Directors of the Company, after reasonable inquiry and investigation, including such consultation, if any, with such Persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company with any of its Subsidiaries to repurchase the Common Shares beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities Directors of the Company determines that the best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company; provided, however, that the Board of Directors of the Company may not declare a Person to be an Adverse Person if, prior to the time that such Person acquired 10% or more of the Common Shares then outstanding, such Person provided to the Board of Directors of the Company in writing a statement of such Person's purpose and intentions in connection with the proposed acquisition of Common Shares, together with any other information reasonably requested of its Subsidiaries which is directly such Person by the Board of Directors of the Company, and the Board of Directors of the Company, based on such statement and reasonable inquiry and investigation, including such consultation, if any, with such Person as the Board of Directors of the Company shall deem appropriate, determines to notify and notifies such Person in writing that it will not declare such Person to be an Adverse Person; provided, further, that the Board of Directors of the Company may expressly condition in any manner a determination not to declare a Person an Adverse Person on such conditions as the Board of Directors of the Company may select, including without limitation, such Person's not acquiring more than a specified amount of shares and/or on such Person's not taking actions inconsistent with the purposes and intentions disclosed by such Person in the statement provided to the Board of Directors of the Company. No delay or indirectly owned failure by the Board of Directors of the Company to declare a Person to be an Adverse Person shall in any Acquiring way waive or otherwise affect the power of the Board of Directors of the Company subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors of the Company should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors of the Company shall deem appropriate, that such Person has not met or complied with any Associate or Affiliate condition specified by the Board of Directors of the Company, the Board of Directors of the Company may at any Acquiring Persontime thereafter declare such Person to be an Adverse Person pursuant to the provisions of this Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company Preference Shares as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preference Share for which a such Right was exercisable may be exercised immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value per one one-thousandth of a Preference Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are there shall not be sufficient authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient unissued Preference Shares to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall: (A) determine the excess shall take all action as may be necessary to authorize and reserve for issuance such number of (1) the value of the Adjustment additional Preference Shares issuable as may from time to time be required to be issued upon the exercise in full of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and thenall Rights outstanding and, if necessary, cash, which shares or cash have an aggregate value equal shall use its best efforts to obtain shareholder approval thereof. Notwithstanding the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence foregoing provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to in lieu of issuing Preference Shares in accordance with Section 11(a)(ii) hereof, if a majority of the Directors then in office determines that such action shall apply uniformly is necessary or appropriate and is not contrary to all outstanding the interests of the holders of the Rights, they may elect to cause the Company to pay, and (y) may suspend if sufficient Preference Shares cannot be issued for such purpose in accordance with the exercisability of the Rights until the expiration of the Substitution Period in order to seek an 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 suspensionprovisions hereof, the Company shall issue a public announcement stating that or pay upon the exercisability exercise of the Rights has been temporarily suspendedRights, as well as a public announcement at such time as cash, property, debt securities, preference shares or common shares, or any combination thereof, having an aggregate Fair Market Value equal to the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Fair Market Price Value of the Common Stock Preference Shares which otherwise would have been issuable pursuant to Section 11(a)(ii). Any such election by a majority of the Directors of the Company must be made and publicly announced within 30 days of the date on the which any Section 11(a)(ii) Adjustment Event first occurs following the Share Acquisition Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preference Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock Preference Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as or than the Preference Shares ("Preference Share Equivalents")) or securities convertible into Common Stock Preference Shares or Equivalent Common Stock Preference Share Equivalents at a price per share of Common Stock Preference Share or per share of Equivalent Common Stock Preference Share Equivalents (or having a conversion price per share, if a security convertible into Common Stock Preference Shares or Equivalent Common StockPreference Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the Common Stock per Preference Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preference Shares outstanding on such record date, plus the number of shares of Common Stock Preference Shares which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock Preference Shares to be offered (and or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preference Shares outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preference Shares and Preference Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock Preference Shares (including any such distribution made in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stockor bonus issue of Preference Shares, but including any dividend payable in stock or bonus issue of shares other than Common StockPreference Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common Stock a Preference Share on such record date, less the Current Per Share Fair Market Price value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preference Share and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a Preference Share on such record date. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any Preference Share, Common Share or any other share or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly traded share or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of Common Stsuch share or per unit of such other security for the 30 consecutive Trading
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall be equal to the result obtained by by
(xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Class A Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Class A Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Class A Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Class A Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Class A Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Class A Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Class A Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Class A Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Class A Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d) hereof) 11(a)(iii), the “Current Market Price” per one share of common stock (or similar equity interest) of an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per share of Class A Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Class A Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex- dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Sources: Stockholder Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Restated Certificate of organization Incorporation of the Company (as amended from time to time, the “Certificate of Incorporation”) but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (xX) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (yY) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Date, Flip-in Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Sources: Tax Benefits Preservation Plan (Sandridge Energy Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification 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 the Company issuable upon the exercise thereofrecapitalization. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
then promptly following any such occurrence (Ca “Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent”), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions ).
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities of the Company other than Common Stock of the Company (including, without limitation, shares or units of shares of preferred stock that the Board of Directors of the Company determines to have the same value as shares of Common Stock of the Company, such shares of preferred stock being referred to herein as “Common Stock Equivalents”), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; provided, howeverprovided that, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a further public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the company and the Preferred Stock on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent the Common Stock Equivalents shall be deemed to equal be the Current Per Share Market Price same as the Common Stock of the Common Company on such date, and the value of any Preferred Stock Equivalents shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and and, in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date for the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days immediately prior to but not including such date and, for purposes of computations pursuant to Section 11(a)(ii) hereof ten (10) Trading Days; provided that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the thirty (30) Trading Day period or the ten (10) Trading Day period, as applicable, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq Stock Market or, if the securities are not listed or admitted to trading on the Nasdaq Stock Market, 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board or the “Pink Sheets” or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and in good faith by the Board of Directors of the Company; provided that, if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Myriad Pharmaceuticals, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii11(a) (iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a) (iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision,
Appears in 1 contract
Sources: Stockholder Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide subdivides the outstanding Common Preferred Stock, (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares, or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that no such adjustment shall be made in no event shall connection with an “earnings and profits” or similar distribution in connection with the consideration Company’s potential conversion to be paid upon a REIT if such distribution is in the exercise form of one Right be less than cash and Common Stock and stockholders have the aggregate par value right to elect cash and/or Common Stock, whether or not the election rights are unlimited or instead subject to proration in case a particular form of the shares of the Company issuable upon the exercise thereofpayment is oversubscribed. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-In Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-Over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-In Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by 50% fifty percent of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock 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 ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-In Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-In Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) thirty-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-In Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) thirty-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-In Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights), or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty Trading Day or ten Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the “Current Market Price” per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in Section 11(d)(i) (other than the last sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above, or if the Preferred Stock is not publicly held or listed or traded in a manner described in Section 11(d)(i), the “Current Market Price” per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits, reverse stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, “Current Market Price” per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. For all purposes of this Agreement, the “Current Market Price” of one one-hundredth of a share of Preferred Stock shall be equal to the Current Market Price of one share of Preferred Stock divided by 100.
(e) Notwithstanding anything in this Agreement to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent in the Exercise Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one ten-thousandth of a share of Common StStock or one one-millionth of a share of Preferred Stock or one ten-thousandth of any o
Appears in 1 contract
Sources: Stockholder Rights Agreement (Stratus Properties Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), shall Section 7(e) hereof) thereafter have a has the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandth of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandth of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Stockholder Rights Agreement (Sandridge Energy Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) of this Agreement, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification 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 the Company issuable upon the exercise thereofrecapitalization. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereofof this Agreement, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereofof this Agreement.
(ii) Subject to the provisions of Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date 24 of this Agreement, directly or indirectly, (1) shall merge into in the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of event any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction alone or together with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company its Affiliates and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in Section 7(e) of this paragraph (ii)Agreement, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) of this Agreement) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Common Stock of the Company in accordance with Section 11(a)(ii) of this Agreement, the Company, acting by or pursuant to a resolution of the Board of Directors, may, and in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) of this Agreement), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or equity securities, if any, of the Company other equity securities than Common Stock of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock that the Board of Directors determines to have the same value as shares of Common Stock of the Company (such shares of preferred stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4) Preferred Stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) of this Agreement expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereofof this Agreement, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a further public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) of this Agreement) per share of the Common Stock of the Company and the Preferred Stock on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent the Common Stock Equivalent shall be deemed to equal be the Current Per Share Market Price same as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereofof this Agreement) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereofof this Agreement. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)) of this Agreement), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereofof this Agreement) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereofof this Agreement) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereofof this Agreement) per one ten-thousandth of a share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date for the purpose of computations pursuant to Section 11(a)(iii) of this Agreement, shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to, but not including such date and, for purposes of computations pursuant to Section 11(a)(ii) of this Agreement ten (10) consecutive Trading Days; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the thirty (30) Trading Day period or the ten (10) Trading Day period, as applicable, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The NASDAQ Capital Market in the United States or, if the securities are not listed or admitted to trading on The NASDAQ Capital Market, as reported in the principal consolidated transaction reporting system in the United States with respect to securities listed on the principal national securities exchange in the United States on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange in the United States, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market in the United States, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are quoted by any such organization, the
Appears in 1 contract
Sources: Shareholder Rights Agreement (Cell Therapeutics Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one- thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Preferred Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stthe
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-millionth of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-millionth of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or equity securities, if any, of the Company other equity securities than Common Stock of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4) Preferred Stock Equivalents which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day thirty-(30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent (as hereinafter defined) shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-millionth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-millionth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-millionth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the thirty (30) Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company; provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be
Appears in 1 contract
Sources: Section 382 Rights Agreement (GTT Communications, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to resolution of the Board of Directors, may, and in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(ia) In the event the Company shall at any time after the date of this Agreement (Ai) declare a dividend on the Common Stock payable in shares of Common Stock, (Bii) subdivide the outstanding Common Stock, (Ciii) combine the outstanding Common Stock into a smaller number of shares or (Div) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, stock which that if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i11(a) and Section 11(a)(ii11(b) hereof, the adjustment provided for in this Section 11(a)(i11(a) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii11(b) hereof.
(iib) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(b) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Common Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of a share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii11(b) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that the product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Applicable Percentage and the Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)11(f) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii11(b) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if .
(c) In lieu of issuing any shares of Common Stock of the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Company in accordance with Section 13 11(b) hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made Company, acting by or pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction a resolution of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock which of the Company that are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii11(b), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (Ai) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (Bii) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1A) Common Stock Equivalents of the Company, (B) cash, (2C) a reduction in the Exercise Price, (3D) Common Stock or other equity securities Equivalents that the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4E) debt securities of the Company, (5F) 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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock assets or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stor
Appears in 1 contract
Sources: Stockholder Rights Agreement (Kendle International Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock Preference Shares payable in shares of Common StockPreference Shares, (B) subdivide the outstanding Common StockPreference Shares, (C) combine the outstanding Common Stock Preference Shares into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock Preference Shares (including any such reclassification in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books Preference Share register of the Company were is open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24, hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote of all Directors, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of l0% or consolidation more of the outstanding Common Shares and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with such Persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company with any of its Subsidiaries to repurchase the Common Shares beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term in- terests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company; provided, however, that the Board of Directors of the Company may not declare a Person to be an Adverse Person if, prior to the time that such Person acquired 10% or more of the Common Shares then outstanding, such Person provided to the Board of Directors in writing a statement of such Person's purpose and intentions in connection with the proposed acquisition of Common Shares, together with any other information reasonably requested of its Subsidiaries which is directly such Person by the Board of Directors, and the Board of Directors, based on such statement and reasonable inquiry and investigation, including such consultation, if any, with such Person as the Board of Directors shall deem appropriate, determines to notify and notifies such Person in writing that it will not declare such Person to be an Adverse Person; provided, further, that the Board of Directors may expressly condition in any manner a determination not to declare a Person an Adverse Person on such conditions as the Board of Directors may select, including without limitation, such Person's not acquiring more than a specified amount of stock and/or on such Person's not taking actions inconsistent with the purposes and intentions disclosed by such Person in the statement provided to the Board of Directors. No delay or indirectly owned failure by the Board of Directors to declare a Person to be an Adverse Person shall in any Acquiring way waive or otherwise affect the power of the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or complied with any Associate or Affiliate condition specified by the Board of Directors, the Board of Directors may at any Acquiring Persontime thereafter declare such Person to be an Adverse Person pursuant to the provisions of this Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter there- after have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company Preference Shares as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common Stock a Preference Share for which a such Right was exercisable may be exercised immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value per one one-hundredth of a Preference Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are there shall not be sufficient authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient unissued Preference Shares to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall: (A) determine the excess shall take all action as may be necessary to authorize and reserve for issuance such number of (1) the value of the Adjustment additional Preference Shares issuable as may from time to time be required to be issued upon the exercise in full of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and thenall Rights outstanding and, if necessary, cash, which shares or cash have an aggregate value equal shall use its best efforts to obtain shareholder approval thereof. Notwithstanding the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence foregoing provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to in lieu of issuing Preference Shares in accordance with Section 11(a)(ii) hereof, if a majority of the Directors then in office determines that such action shall apply uniformly is necessary or appropriate and is not contrary to all outstanding the interests of the holders of the Rights, they may elect to cause the Company to pay, and (y) may suspend if sufficient Preference Shares cannot be issued for such purpose in accordance with the exercisability of the Rights until the expiration of the Substitution Period in order to seek an 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 suspensionprovisions hereof, the Company shall issue a public announcement stating that or pay upon the exercisability exercise of the Rights has been temporarily suspendedRights, as well as a public announcement at such time as cash, property, debt securities, preference shares or common shares, or any combination thereof, having an aggregate Fair Market Value equal to the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Fair Market Price Value of the Common Stock Preference Shares which otherwise would have been issuable pursuant to Section 11(a)(ii). Any such election by a majority of the Directors of the Company must be made and publicly announced within 30 days of the date on the which any Section 11(a)(ii) Adjustment Event first occurs following the Share Acquisition Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preference Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock Preference Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as or than the Preference Shares ("Preference Share Equivalents")) or securities convertible into Common Stock Preference Shares or Equivalent Common Stock Preference Share Equivalents at a price per share of Common Stock Preference Share or per share of Equivalent Common Stock Preference Share Equivalents (or having a conversion price per share, if a security convertible into Common Stock Preference Shares or Equivalent Common StockPreference Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the Common Stock per Preference Shares on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preference Shares outstanding on such record date, plus the number of shares of Common Stock Preference Shares which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock Preference Shares to be offered (and or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preference Shares outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preference Shares and Preference Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Preference Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock Preference Shares (including any such distribution made in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockPreference Shares, but including any dividend payable in stock shares other than Common StockPreference Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of Common Stock a Preference Share on such record date, less the Current Per Share Fair Market Price value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-hundredth of Common Stock a Preference Share and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a Preference Share on such record date. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any Preference Share, Common Share or any other share or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly traded share or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of Common Stsuch share or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to (but not including) such date; provided, however, that in the event that the Fair Market Value per share of any share is determined during a period following the announcement by the issuer of such share of (x) a dividend or distribution on such share payable in additional shares or securities convertible into additional shares or (y) any subdivision, combination or reclassification of such shares, and prior to the expiration of the 30 Trading Day period after (but not including) the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Agreement (A) declare a dividend on hereof there shall be any change in the Common Stock payable or the Preferred Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in shares capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock or Preferred Stock, as the case may be (Bother than distribution of the Rights or regular quarterly cash dividends) subdivide or otherwise, then, in each such event the outstanding Common Stock, (C) combine Board shall make such appropriate adjustments in the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including or the number and kind of other securities) issuable upon exercise of each Right (or in exchange for any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Right pursuant to Section 11(a24), the Exercise Price and Redemption Price in effect at such time and/or the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the effect of reducing or limiting the benefits the holders 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder Rights would have owned upon had absent such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereofevent. If an event occurs which would require requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition made prior to, and shall be made prior in addition to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date 24 of this Agreement, directly or indirectly, in the event that any Person becomes an Acquiring Person (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other event, an “Acquiring Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and then promptly following such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that Event each holder of a Right, except as provided in this paragraph (ii)Section 7(f) hereof, shall thereafter have a the right to receivereceive for each Right, upon exercise of such Right at the then current Exercise Price thereof in accordance with the terms of this AgreementAgreement and payment of the Exercise Price in effect immediately prior to the occurrence of the Triggering Event, such a number of shares one one-hundredths (1/100ths) of Common Stock of the Company a Preferred Share as shall equal the result quotient obtained by dividing (xA) the product obtained by multiplying (1) the then current Exercise Price in effect immediately prior to the occurrence of the Acquiring Person Event by (2) the then number of one quarter shares one-hundredths (1/100ths) of Common Stock a Preferred Share for which a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(iiAcquiring Person Event, by (B) Event and fifty percent (y50%) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the for Common Stock (determined pursuant to Section 11(d)) Shares on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares")Acquiring Person Event; provided, however, that if the transaction that would otherwise give rise to Exercise Price and the foregoing adjustment is also number of Preferred Shares of the Corporation so receivable upon exercise of a Right shall be subject to the provisions of further adjustment as appropriate in accordance with Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant 11(f) hereof to this Section 11(a)(ii). The Company shall not enter into reflect any transaction events occurring in respect of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which as a result Common Shares of the consummation of such transaction, would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. Notwithstanding anything in this Agreement to the contrary, from and Corporation after the first occurrence of a Section 11(a)(ii) the Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number lieu of shares of Common Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights issuing Preferred Shares in accordance with Section 11(a)(ii)) hereof, the Corporation may, if the Board determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights, or if any necessary regulatory approval for such issuance has not been obtained by the Corporation, the Company shall: (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called excess, the "“Spread"), ”) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Preferred Shares, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) Common Shares, (3) a reduction in the Exercise Price, (34) Common Stock or other equity securities of the Company Corporation (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board has deemed to have the same value as shares of Common Stock Shares (such shares or units of shares of preferred referred stock are herein called "Equivalent “Common Stock")Stock Equivalents”), except to the extent that the Corporation has not obtained any necessary stockholder or regulatory approval for such issuance, (45) debt securities of the CompanyCorporation, except to the extent that the Corporation has not obtained any necessary stockholder or regulatory approval for such issuance, (56) other assets, assets or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, that if the Company Corporation shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (xv) the first occurrence of a Section 11(a)(ii) Acquiring Person Event and (yw) the date on which the Company's Corporation’s right of redemption pursuant to Section 23(a) expires (the later of (xv) and (yw) being referred to herein as the "Section 11(a)(ii) Adjustment Acquiring Person Trigger Date"), then the Company Corporation shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Acquiring Person Trigger Date, in order that the Company Corporation may seek stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such thirty (30) day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company Corporation determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), 11(a)(ii) the Company Corporation (x) shall provide, subject to Section 11(a)(ii7(f) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares shares, to take any action to obtain any required regulatory approval 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 Corporation shall issue a public announcement or disclosure stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement or disclosure at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment the Common Shares shall be the Current Per Share Market Price of the Common Stock Shares on the Section 11(a)(ii) Adjustment Date, Acquiring Person Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock Shares on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Sources: Shareholder Rights Agreement (National Technical Systems Inc /Ca/)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than 4.95% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)). If (x) a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of in excess of 4.95% of the then-outstanding Common Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)) (such shares, the “Excess Shares”) and (y) the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares would jeopardize or endanger the value or availability to the Company of the Tax Benefits or the Board otherwise determines, in its sole discretion, that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with prompt written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Tax Benefits Preservation Plan (Bonanza Creek Energy, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Class A Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Class A Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Class A Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock 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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St,
Appears in 1 contract
Sources: Stockholder Rights Agreement
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The NASDAQ Stock Market or the New York Stock Exchange or, if the securities are not listed or admitted to trading on The NASDAQ Stock Market or 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Shareholder Rights Agreement (Harvard Apparatus Regenerative Technology, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-
Appears in 1 contract
Sources: Shareholder Rights Agreement (Brooktrout Technology Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide subdivides the outstanding Common StockPreferred Shares, (C) combine combines the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Share transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a "Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent"), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casethen promptly following that occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock Preferred Shares of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value (as defined herein) of one one-thousandth of a Preferred Share Market Price of the Common Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Shares in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors, may, and if the number of shares of Common Stock Preferred Shares which are authorized by the Company's articles Amended Articles of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Share Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Preferred Shares, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any Preferred Shares issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day that period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such -------------------------------------------------------------------------------- Page 15 18 suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall a Preferred Share will be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) of a Preferred Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Share Equivalent Common Stock shall will be deemed considered to equal have the Current Per same value as a Preferred Share Market Price of the Common Stock on such that date.
(b) If the Company shall fix fixes a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 calendar days after such that record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares ("Preferred Share Equivalents")) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Share Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such that record date, the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Per Share that Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible); provided, however, that but in no event shall will the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. In case such If the subscription price may be paid in a consideration part or all of which shall be is in a form other than cash, the value of such consideration shall will be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company shall will not be deemed considered outstanding for the purpose of any such computation. Such Those adjustments shall will be made successively whenever any such a record date is fixed; and in the event that if any such rights or warrants are not so issued, the Exercise Price shall will be adjusted to be the Exercise Price which that would then be in effect if such the applicable record date had not been fixed.
(c) If the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in capital stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of Common Stock one one-thousandth of a Preferred Share on such that record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be so distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereofof one one-thousandth of a Preferred Share, but in no event will the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the Right. Those adjustments will be made successively whenever any such record date is fixed, and if any such distribution is not so made, the Exercise Price will again be adjusted to be the Exercise Price that would be in effect if the applicable record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any Preferred Share, Common Share or any other share or any Right or other security or any other property will be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date will be the average of the daily closing prices per one share of Common Stsuch stock or per unit of such other security for the 30 consecutive Trading Days (as defined herein) immediately prior to such date; however, if the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value will be properly adjusted to take into account ex-dividend trading. The closing price for each day will be the last sale price, regular way, or, if no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date will be determined reasonably and with utmost good faith to the holders of the Rights
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq Capital Market or, if the securities are not listed or admitted to trading on the Nasdaq Capital Market, 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 not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common Stof
Appears in 1 contract
Sources: Shareholder Rights Agreement (Zoll Medical Corporation)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
Person (Ca "Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent"), or recapitalization of the Company, or then promptly following any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such caseoccurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed Preferred Stock in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company, (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has 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 competent nationally recognized investment banking firm selected by the BoardBoard of Directors of the Company; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); providedPROVIDED, howeverHOWEVER, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, PROVIDED, HOWEVER, that if at
Appears in 1 contract
Sources: Shareholder Rights Agreement (Burnham Pacific Properties Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares shares, or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Common Stock of the Company in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to a resolution of the Board of Directors, may, and in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles of organization ’s Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of preferred stock, such as the Preferred Stock, that the Board of Directors has determined to have the same value as shares of Common Stock of the Company (such shares of preferred stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for
Appears in 1 contract
Sources: Tax Benefits Preservation Rights Agreement (Capital Trust Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each which may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Rights Agreement (A) declare a or pay any dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide or split the outstanding Common Stockshares of Preferred Stock into a greater number of shares, (C) combine or consolidate the outstanding Common shares of Preferred Stock into a smaller number of shares or effect a reverse split of the outstanding shares of Preferred Stock, or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassificationevent, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationevent; 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 the exercise thereofof one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 of this Rights Agreement, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an Exempt Person), alone or together with its Affiliates and Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personexcept pursuant to a Qualifying Tender Offer, then, and except as otherwise provided in each such casethis Section 11, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a the right to receive, receive upon exercise of such Right at a price equal to the then current Exercise Price multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this AgreementRights Agreement and in lieu of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value of the Company's Common Stock (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares")event; provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Articles of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii)Rights, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares Common Stock issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Sharessuch Common Stock, upon payment exercise of the applicable Exercise PriceRights, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stockcommon stock equivalents")), (4) debt securities of the Company, (5) other assets, 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 based upon of Directors of the advice of a competent investment banking firm selected by the BoardCompany; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) ), and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the occurrence of an event described in Section 11(a)(ii) Adjustment Date), in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period")shares. To the extent that the Company determines that some action need be taken pursuant to the first or second sentence preceding sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 any such period, as extended, in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect and shall promptly notify the Rights Agent of such suspension. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock at the Close of Business on the date of the occurrence of one of the events described in Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock "common stock equivalent" shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock on such date.
(b) If In the event that the Company shall shall, after the Record Date, fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common shares having the same rights, privileges and preferences as the Preferred Stock ("equivalent preferred stock")) or securities convertible into Common Preferred Stock or Equivalent Common Stock equivalent preferred stock at a price per share of Common Preferred Stock or per share of Equivalent Common Stock equivalent preferred stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockequivalent preferred stock) less than the Current Per Share Fair Market Price Value per share of the Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common Stock and/or the equivalent preferred stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, date plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the exercise thereofof one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix a record date for the making of a distribution to all holders of Common the Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of or evidences of indebtedness, cash indebtedness or assets (other than a regular periodic quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Preferred Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value per share of Common the Preferred Stock on such record date, less the Current Per Share Fair Market Price (as determined pursuant to Section 11(d) hereof) Value of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Value per share of the Preferred Stock; 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 exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement, the "Fair Market Value" of any share of Preferred Stock, Common Stock or any other stock or any Right or other security or any other property on any date shall be determined as determined pursuant to provided in this Section 11(d) hereof) per one share ). In the case of Common Sta publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide the outstanding Common StockPreferred Shares, (C) combine the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Stock Preferred Shares (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, subject to and so except as otherwise provided in Section 7(e) and this Section 11(a), the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Shares transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, provided that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section Sections 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to the provisions of Section 24, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
then promptly following any such occurrence (Ca “Section 11(a)(ii) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splitEvent”), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, subject to and so except as provided in this paragraph (iiSection 7(e), shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a Preferred Share, such number of shares of Common Stock of the Company Shares as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value per Common Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from From and after the first occurrence of a Section 11(a)(ii) Eventsuch event, any Rights beneficially owned that are or were acquired or Beneficially Owned by (i) an any Acquiring Person (or any Associate or Affiliate of an such Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become be null and void without any further action action, and no any holder or beneficial owner of such Rights shall thereafter have any rights whatsoever with respect no right to exercise such Rights, whether Rights under any provision of this Agreement or otherwise. The Neither the Company shall use all reasonable efforts to ensure that nor the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but Rights Agent shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. No Right Certificate shall be issued pursuant to Section 3 that represents Rights Beneficially Owned by an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Affiliates Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and Associates void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any transferee nominee of such Acquiring Person, Associate or Affiliate or with respect to any Common Shares otherwise deemed to be Beneficially Owned by any of them hereunderthe foregoing; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or other Person whose Rights would be null and void pursuant to the preceding sentence shall be canceled.
(iii) In lieu of issuing any Common Shares of the Company in accordance with Section 11(a)(ii), the Company, acting by or pursuant to a resolution of the Board, may, and in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Shares or equity securities of the Company other than Common Shares (including, without limitation, shares or units of shares of preferred stock (including but not limited to Preferred Shares) that the Board determines to have the same value as Common Shares), such equity securities being referred to herein as “Common Share Equivalents”, (2) cash, (23) a reduction in the Exercise Price, (34) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Shares Equivalents which the Board has deemed to have the same value as shares of the Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Shares, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon after receiving the advice of a competent an investment banking firm selected by the BoardBoard in its discretion; provided, howeverprovided that, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock Shares (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the period of thirty (30) day period days set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a further public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment the Common Shares and Preferred Shares of the Company shall be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) per Common Share Market Price and Preferred Share of the Common Stock Company, as applicable, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent the Common Stock Share Equivalents shall be deemed to equal be the Current Per Share Market Price of same as the Common Stock Shares on such date, and the value of any Preferred Shares Equivalents shall be deemed to have the same value as the Preferred Shares to which they relate on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares (“Preferred Shares Equivalents”)) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Shares Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Shares Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Shares Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock Preferred Shares and/or Preferred Shares Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Shares Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, provided that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company or any Subsidiary shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and and, in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) per one one-thousandth of Common Stock a Preferred Share on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) per one one-thousandth of a Preferred Share; provided that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any Common Share, Preferred Share or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date for the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii), shall be deemed to be the average of the daily closing prices per share of Common Stsuch stock or per unit of such other security for the thirty (30) consecutive Trading Days immediately prior to but not including such date and, for purposes of computations pursuant to Section 11(a)(ii), ten (10) consecutive Trading Days; provided that, in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or
Appears in 1 contract
Sources: Tax Benefits Preservation Rights Agreement (Myrexis, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii) or the Company is otherwise not able to issue shares of Common Stock to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any valid agreement or instrument then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent availableavailable and permitted by any valid agreement or instrument then in effect to which the Company is a party), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available and permitted by any valid agreement or instrument then in effect to which the Company is a party) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such shareholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii), shall thereafter have a right to receive, upon exercise of such Right at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter half shares of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are is authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common StStock;
Appears in 1 contract
Sources: Shareholder Rights Agreement (Ryans Family Steakhouses Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall be entitled to receive Common Stock (or other shares of capital stock of the Company) that would result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than 4.95% of the then-outstanding Company Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)). If (x) a holder would, but for the proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Right a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of in excess of 4.95% of the then-outstanding Company Stock (or, in the case of a Grandfathered Person, becoming the Beneficial Owner of an additional share of Common Stock (or other shares of capital stock of the Company)) (such shares, the “Excess Shares”) and (y) the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares would jeopardize or endanger the value or availability to the Company of the Tax Benefits or the Board otherwise determines, in its sole discretion, that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months with a principal amount, equal to the Current Market Price of a share of Common Stock at the Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise have been issuable to such holder. The Company shall not enter into any transaction provide the Rights Agent with prompt written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Sources: Tax Benefits Preservation Plan (Moneygram International Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide subdivides the outstanding Common Preferred Stock, (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares, or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall unless the event causing such Person to become an Acquiring PersonPerson is a Flip-over Event, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have substantially the same value or economic rights as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock 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 ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d11(a)(iii), the “Current Market Price” per share of common stock (or similar equity interest) hereofof an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per one share of Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights), or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Sources: Stockholder Rights Agreement (Patterson Uti Energy Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common any outstanding shares of Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the subdivides any outstanding Common shares of Preferred Stock, (C) combine the combines any outstanding Common shares of Preferred Stock into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section Section 11(a) and Section 7(e), the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) applicable transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both Section this Section 11(a)(i) and Section Section 11(a)(ii) hereof), the adjustment provided for in this Section Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event any Person (other than an any Exempt Person) becomes an Acquiring Person (such event, a “Flip-in Event”), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise of such Right thereof at a price equal to the then then-current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall be equal to the result obtained by (xA) multiplying the then then-current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-in Event and (yB) dividing that product (which, following such first occurrence, occurrence shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this Agreement) by fifty percent (50% %) of the Current Per Share Market Price per share of the Class A Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Class A Common Stock which are authorized by the Company's articles of organization Charter, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"), ”) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon the exercise of a Right and payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock shares or fractions of a share of preferred stock or other equity securities of the Company (including, without limitation, including shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board has deemed determined to have substantially the same value or economic rights as shares of Class A Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent “Common Stock")Stock Equivalents”), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Exercise Price), where such aggregate value has been determined by the Board based upon the advice of a competent investment banking firm financial advisor selected by the Board; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) Redemption Period expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment “Flip-in Trigger Date"”), then the Company shall be obligated to deliver, to the extent permitted by applicable law, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Class A Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Flip-in Event, the Board shall determine determines in good faith that it is likely that sufficient additional shares of Class A Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day 30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day 30)-day period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first sentence or second third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an such stockholder approval for authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice of such announcements to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of each Adjustment Shares Share shall be the Current Per Share Market Price per share of the Class A Common Stock on the Section 11(a)(ii) Adjustment Flip-in Trigger Date, and the per share or per unit value of any Equivalent Class A Common Stock Equivalent shall be deemed to equal the Current Per Share Market Price per share of the Class A Common Stock on such date. The Board may establish procedures to allocate the right to receive shares of Class A Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If In case the Company shall fix fixes a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar forty-five (45) days after such record date) to subscribe for Preferred Stock (or purchase Common shares having the same rights, privileges and preferences as the shares of Preferred Stock or (“Equivalent Common Stock Preferred Stock”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Preferred Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock so to be offered (and and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price Price, and the denominator of which shall be the number of shares of Common Preferred Stock and/or Equivalent Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or and/or Equivalent Common Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a by delivery of consideration part or all of which shall may be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof as determined in accordance good faith by the Board, whose determination shall be described in a statement filed with Section 11(d) hereofthe Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Common Preferred Stock and Equivalent Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.
(c) If In case the Company shall fix fixes a record date for the making of a distribution to all holders of Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionssubscription rights, subscription rights options or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Preferred Stock on such record date, less the Current Per Share Market Price fair market value (as determined pursuant to Section 11(d) hereofin good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one a share of Common Preferred Stock and the denominator of which shall be the such Current Per Share Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.
(as determined d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(d) hereof) 11(a)(iii), the “Current Market Price” per one share of common stock (or similar equity interest) of an issuer on any date shall be deemed to be the average of the daily Closing Prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii), the “Current Market Price” per share of Class A Common StStock on any date shall be deemed to be the average of the daily Closing Prices per share of such Class A Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of common stock (or other security) of an issuer is determined during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into shares of such common stock (or other security) (other than the Rights) or (B) any subdivision, combination or reclassification of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “Current Market Price” shall be properly adjusted, as determined in good faith by the Board, to take into account any trading during the period prior to such ex-dividend date or record date. If an issuer’s shares of common stock (or other security) are not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 1 contract
Sources: Stockholder Rights Agreement (Purple Innovation, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide subdivides the outstanding Common StockPreferred Shares, (C) combine combines the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Share transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a "Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent"), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casethen promptly following that occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock Preferred Shares of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value (as defined herein) of one one-thousandth of a Preferred Share Market Price of the Common Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Shares in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors, may, and if the number of shares of Common Stock Preferred Shares which are authorized by the Company's articles Second Amended and Restated Articles of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Share Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Preferred Shares, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any Preferred Shares issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day that period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this this
Section 11(a)(iii11(a) (iii), the value of Adjustment Shares shall a Preferred Share will be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) of a Preferred Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Share Equivalent Common Stock shall will be deemed considered to equal have the Current Per same value as a Preferred Share Market Price of the Common Stock on such that date.
(b) If the Company shall fix fixes a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 calendar days after such that record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares ("Preferred Share Equivalents")) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Share Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such that record date, the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Per Share that Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible); provided, however, that but in no event shall will the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. In case such If the subscription price may be paid in a consideration part or all of which shall be is in a form other than cash, the value of such consideration shall will be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company shall will not be deemed considered outstanding for the purpose of any such computation. Such Those adjustments shall will be made successively whenever any such a record date is fixed; and in the event that if any such rights or warrants are not so issued, the Exercise Price shall will be adjusted to be the Exercise Price which that would then be in effect if such the applicable record date had not been fixed.
(c) If the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in capital stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of Common Stock one one-thousandth of a Preferred Share on such that record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be so distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereofof one one-thousandth of a Preferred Share, but in no event will the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the Right. Those adjustments will be made successively whenever any such record date is fixed, and if any such distribution is not so made, the Exercise Price will again be adjusted to be the Exercise Price that would be in effect if the applicable record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any Preferred Share, Common Share or any other share or any Right or other security or any other property will be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date will be the average of the daily closing prices per one share of Common Stsuch stock or per unit of such other security for the 30 consecutive Trading Days (as defined herein) immediately prior to such date; however, if the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value will be properly adjusted to take into account ex-dividend trading. The closing price for each day will be the last sale price, regular way, or, if no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date will be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors, but if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date will be determined by a nationally recognized investment banking firm selected by the
Appears in 1 contract
Sources: Shareholder Rights Agreement (Standard Products Co)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Common Stock of the Company in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to a resolution of the Board, may, and in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon after receiving the advice of a competent nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are 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. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Sources: Tax Benefits Preservation Agreement (Unwired Planet, Inc.)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the Company or equity securities, if any, of the Company other than Common Stock of the Company (including without limitation shares, or units of shares, of Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (23) a reduction in the Exercise Price, (34) Common Preferred Stock or other equity securities Equivalents which the Board of Directors of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or debt securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St,
Appears in 1 contract
Sources: Shareholder Rights Agreement (Imperial Parking Corp)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization Directors of the Company, by majority vote, shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or any merger together with its Affiliates and Associates, has become the Beneficial Owner of 10% or consolidation more of the outstanding shares of Common Stock of the Company and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with any such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock of its Subsidiaries the Company beneficially owned by such Person or any other to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company and its shareholders, but for the actions and possible actions of such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of its Subsidiaries which is directly the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such Persons as the Board of Directors shall deem appropriate, that such Person has not met or indirectly owned complied with any condition specified by the Board of Directors, the Board of Directors may at any Acquiring time thereafter declare such Person or any Associate or Affiliate to be an Adverse Person pursuant to the provisions of any Acquiring Personthis Section 11(a)(ii)(B), then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one ten-thousandth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, the Company, acting by or pursuant to resolution of the Board of Directors, may, and in the event that the number of shares of Common Preferred Stock which are authorized by the Company's articles Articles of organization Organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any shares of Preferred Stock issued upon such exercise, has an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares or and/or cash have an aggregate value equal to the Spread. If the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Preferred Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Stock Equivalent Common Stock shall be deemed to equal have the Current Per Share Market Price of same value as the Common Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are quoted by any such
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) event that any Person, alone or together with its Related Persons, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after (the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation first occurrence of such merger or combination and event, the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock“Flip-In Event”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as unless the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable event causing such Person to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), Section 7(e) hereof) shall thereafter have a the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrenceFlip-In Event, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) such Flip-In Event (such number of shares is herein called shares, the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made in connection with any exercise effected pursuant to this Section 11(a)(ii). The Company , no holder of Rights shall not enter into any transaction be entitled to receive Common Stock (or other shares of capital stock of the kind listed Company) that would result in this Section 11(a)(iisuch holder, together with such holder’s Related Persons, becoming the Beneficial Owner of more than (1) if at 4.95% of the time then-outstanding Common Stock or (2) 4.95% (by value) of such transaction there are any rightsthe then-outstanding Company Stock (or, warrantsin the case of a Grandfathered Person, instruments becoming the Beneficial Owner of one or securities outstanding more additional shares of Common Stock (or any agreements one or arrangements which more other shares of capital stock of the Company) other than as a result of the consummation acquisition of such transaction, would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. Notwithstanding anything in this Agreement Beneficial Ownership of shares of Company Stock pursuant to the contraryConvertible Notes or the Warrants). If (x) a holder would, from and after but for the first occurrence proviso in the immediately preceding sentence, be entitled to receive upon exercise of a Section 11(a)(iiRight a number of shares that would otherwise result in such holder, together with such holder’s Related Persons, becoming the Beneficial Owner of in excess of (1) Event4.95% of the then-outstanding Common Stock or (2) 4.95% (by value) of the then-outstanding Company Stock (or, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate in the case of an Acquiring a Grandfathered Person, (ii) a transferee becoming the Beneficial Owner of an Acquiring Person one or more additional shares of Common Stock (or one or more other shares of any capital stock of the Company) other than as a result of the acquisition of Beneficial Ownership of shares of Company Stock pursuant to the Convertible Notes or the Warrants) (such Associate shares, the “Excess Shares”) and (y) the Board, in its sole discretion, makes a determination that such holder’s receipt of Excess Shares would jeopardize or Affiliateendanger the value or availability to the Company of the Tax Benefits or the Board otherwise determines, in its sole discretion, that such holder’s receipt of Excess Shares is not in the best interests of the Company, then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to receive an amount, at the election of the Company, in (1) who becomes a transferee after cash, (2) debt securities of the Acquiring Person becomes suchCompany, (3) other assets, or (iii4) 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 the Board of Directors combination of the Company has determined is part foregoing, equal to the Current Market Price of a plan, arrangement or understanding which has as a primary purpose or effect share of Common Stock at the avoidance Close of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner Business on the Trading Day following the date of such Rights shall exercise multiplied by the number of Excess Shares that would otherwise have any rights whatsoever with respect been issuable to such Rights, whether under any provision of this Agreement or otherwiseholder. The Company shall use all reasonable efforts to ensure that provide the provisions Rights Agent with prompt written notice of this Section 11(a) and Section 4(b) hereof are complied withthe identity of any such Acquiring Person, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Related Person or any Affiliates and Associates thereof the nominee or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides the outstanding Common Preferred Stock, ; (C) combine combines the outstanding Common Preferred Stock into a smaller number of shares shares; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall may the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise thereofof one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 2423 and Section 24 hereof, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) event that any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring PersonPerson is a transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly following the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (ii), shall Section 7(e) hereof) thereafter have a has the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one ten- thousandths of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares ten-thousandths of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that the number of shares of Common Stock which are authorized by the Company's articles Certificate of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Common Stock Preferred Shares payable in shares of Common StockPreferred Shares, (B) subdivide subdivides the outstanding Common StockPreferred Shares, (C) combine combines the outstanding Common Stock Preferred Shares into a smaller number of shares or (D) issue issues any shares of its capital stock in a reclassification of the Common Stock Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a) and Section 7(e), the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Stock (or other capital stock, as the case may be) Preferred Share transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that but in no event shall may the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. If an event occurs which that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24, in the event
(A) if any Person, alone or together with its Affiliates and Associates, becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1a “Section 11(a)(ii) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common StockEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such casethen promptly following that occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (iiSection 7(e), shall thereafter have has a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock Preferred Shares of the Company as shall equal equals the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandths of Common Stock a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Fair Market Value (as defined herein) of one one-thousandth of a Preferred Share Market Price of the Common Stock (determined pursuant to in accordance with Section 11(d)) on the date of the occurrence of any one of the events listed above in this that Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not enter into take any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments action which would eliminate or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to , provided that notwithstanding the contrary, from and after foregoing the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after Company may redeem the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a23(a)(ii), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In lieu of issuing any Preferred Shares in accordance with Section 11(a)(ii), the event that Company, acting by resolution of the Board of Directors, may, and if the number of shares of Common Stock Preferred Shares which are authorized by the Company's articles ’s Amended Articles of organization Incorporation, as amended (or other instrument governing its corporate affairs), but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by resolution of the Board of Directors, shall: (A) determine the excess of (1X) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Share Equivalents which the Board of Directors has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))Preferred Shares, (4) debt securities of the Company, (5) other assets, assets of the Company or (6) any combination of the foregoingforegoing which, having when added to any Preferred Shares issued upon such exercise, has an aggregate value equal to the Current Value, where with such aggregate value has been determined by the Board of Directors based upon the advice of a competent nationally recognized investment banking firm selected by the BoardBoard of Directors; provided, however, but if the Company shall has not have made adequate provision to deliver the value pursuant to determined in accordance with clause (B) above within thirty (30) 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right for exercise and without requiring payment of the Exercise Price, shares of Common Stock Preferred Shares (to the extent available) and then, if necessary, cash, which shares or and cash have an aggregate value equal to the Spread. If the Board shall determine of Directors determines in good faith that it is likely that sufficient additional shares of Common Stock Preferred Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not to more than ninety (90) 90 days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day that period, as it may be extended, is herein called the "“Substitution Period"”). To the extent that the Company determines that some action need must be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof7(e), that such action shall will apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such that first sentence and to determine the value thereof. In the event of On any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a suspended and another public announcement at such time as when the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares shall a Preferred Share will be the Current Per Fair Market Value (as determined pursuant to Section 11(d)) of a Preferred Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Preferred Share Equivalent Common Stock shall will be deemed considered to equal have the Current Per same value as a Preferred Share Market Price of the Common Stock on such that date.
(b) If the Company shall fix fixes a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock Preferred Shares entitling them (for a period expiring within 45 calendar days after such that record date) to subscribe for or purchase Common Stock Preferred Shares (or Equivalent Common Stock securities having the same or more favorable rights, privileges and preferences as the Preferred Shares (“Preferred Share Equivalents”)) or securities convertible into Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents at a price per share of Common Stock Preferred Share or per share of Preferred Share Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock Preferred Shares or Equivalent Common StockPreferred Share Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereof) of the Common Stock per Preferred Share on such that record date, the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of shares of Common Stock Preferred Shares which the aggregate offering price of the total number of shares of Common Stock Preferred Shares or Equivalent Common Stock Preferred Share Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Per Share that Fair Market Price Value and the denominator of which shall be the number of shares of Common Stock Preferred Shares outstanding on such that record date, plus the number of additional shares of Common Stock or Equivalent Common Stock Preferred Shares and Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible); provided, however, that but in no event shall will the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the exercise thereofRight. In case such If the subscription price may be paid in a consideration part or all of which shall be is in a form other than cash, the value of such consideration shall will be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof). Preferred Shares of Common Stock owned by or held for the account of the Company shall will not be deemed considered outstanding for the purpose of any such computation. Such Those adjustments shall will be made successively whenever any such a record date is fixed; and in the event that if any such rights or warrants are not so issued, the Exercise Price shall will be adjusted to be the Exercise Price which that would then be in effect if such the applicable record date had not been fixed.
(c) If the Company shall fix fixes a record date for the making of a distribution to all holders of Common Stock Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Common StockPreferred Shares, but including any dividend payable in capital stock other than Common StockPreferred Shares) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such that record date shall will be determined by multiplying the Exercise Price in effect immediately prior to such that record date by a fraction, the numerator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of Common Stock one one-thousandth of a Preferred Share on such that record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof)) of the portion of the cash, assets or evidences of indebtedness so to be so distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one share one-thousandth of Common Stock a Preferred Share and the denominator of which shall will be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d)) hereofof one one-thousandth of a Preferred Share, but in no event will the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of the Right. Those adjustments will be made successively whenever any such record date is fixed, and if any such distribution is not so made, the Exercise Price will again be adjusted to be the Exercise Price that would be in effect if the applicable record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any Preferred Share, Common Share or any other share or any Right or other security or any other property will be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date will be the average of the daily closing prices per one share of Common Stsuch stock or per unit of such other security for the 30 consecutive Trading Days (as defined herein) immediately prior to such date; however, if the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise 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 Common Stock or capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, ; or
(CB) during such time as there is an Acquiring Person, there shall be any reclassification the Board of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation Directors of the Company shall declare any Person to be an Adverse Person, after (x) a determination that such Person, alone or together with any its Affiliates and Associates, has become the Beneficial Owner of its Subsidiaries 10% or any other more of the outstanding shares of Common Stock and (y) a determination by the Board of Directors, after reasonable inquiry and investigation, including such consultation, if any, with such persons as such directors shall deem appropriate, that (a) such Beneficial Ownership by such Person is intended to cause, is reasonably likely to cause or will cause the Company to repurchase the Common Stock beneficially owned by such Person or to cause pressure on the Company to take action or enter into a transaction or series of transactions (whether or not which would provide such Person with or into or otherwise involving an Acquiring Person) which has short-term financial gain under circumstances where the effect, directly or indirectly, Board of increasing by more than 1% Directors determines that the proportionate share of the outstanding shares of any class of equity securities best long-term interests of the Company or any and its shareholders, but for the actions and possible actions of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring such Person, would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company; provided, however, that the Board of Directors of the Company may not declare a Person to be an Adverse Person if, prior to the time that such Person acquired 10% or more of the shares of Common Stock then outstanding, such Person provided to the Board of Directors in writing a statement of such Person's purpose and intentions in connection with the proposed acquisition of Common Stock, together with any other information reasonably requested of such Person by the Board of Directors, and the Board of Directors, based on such statement and reasonable inquiry and investigation, including such consultation, if any, with such persons as the directors shall deem appropriate, determines to notify and notifies such Person in writing that it will not declare such Person to be an Adverse Person; provided further, that the Board of Directors may expressly condition in any manner a determination not to declare a Person an Adverse Person on such conditions as the Board of Directors may select, including without limitation, such Person's not acquiring more than a specified amount of stock and/or on such Person's not taking actions inconsistent with the purposes and intentions disclosed by such Person in the statement provided to the Board of Directors. No delay or failure by the Board of Directors to declare a Person to be an Adverse Person shall in any way waive or otherwise affect the power of the Board of Directors subsequently to declare a Person to be an Adverse Person. In the event that the Board of Directors should at any time determine, upon reasonable inquiry and investigation, including consultation with such persons as the directors shall deem appropriate, that such Person has not met or complied with any condition specified by the Board of Directors, the Board of Directors may at any time thereafter declare such Person to be an Adverse Person pursuant to the provisions of this Section 11(a)(ii)(B); then, and in each such case, promptly following any such occurrence, proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-hundredths of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per one one-hundredth of a share of the Common Preferred Stock (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction of the kind listed in this Section 11(a)(ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of there shall not be sufficient Treasury shares or authorized but unissued shares of Common Preferred Stock which are authorized by the Company's articles of organization but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall: (A) determine the excess shall take all action as may be necessary to authorize and reserve for issuance such number of (1) the value additional shares of the Adjustment Shares issuable Preferred Stock as may from time to time be required to be issued upon the exercise in full of a Right (the "Current Value") over (2) the Exercise Price (such excess is herein called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock (to the extent available) and thenall Rights outstanding and, if necessary, cash, which shares or cash have an aggregate value equal shall use its best efforts to obtain shareholder approval thereof. Notwithstanding the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence foregoing provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to in lieu of issuing shares of Preferred Stock in accordance with Section 11(a)(ii) hereof, if a majority of the Disinterested Directors then in office determines that such action shall apply uniformly is necessary or appropriate and is not contrary to all outstanding the interests of the holders of the Rights, they may elect to cause the Company to pay, and (y) may suspend if sufficient shares of Preferred Stock cannot be issued for such purpose in accordance with the exercisability of the Rights until the expiration of the Substitution Period in order to seek an 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 suspensionprovisions hereof, the Company shall issue a public announcement stating that or pay upon the exercisability exercise of the Rights has been temporarily suspendedRights, as well as a public announcement at such time as cash, property, debt securities, shares of Preferred Stock or Common Stock, or any combination thereof, having an aggregate Fair Market Value equal to the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Fair Market Price Value of the Common shares of Preferred Stock which otherwise would have been issuable pursuant to Section 11(a)(ii). Any such election by a majority of the Disinterested Directors of the Company must be made and publicly announced within 30 days of the date on the which any Section 11(a)(ii) Adjustment Event first occurs following the Stock Acquisition Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same rights, privileges and preferences as the shares of Preferred Stock ("preferred stock equivalents")) or securities convertible into Common Preferred Stock or Equivalent Common Stock preferred stock equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Stock preferred stock equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common Stockpreferred stock equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Preferred Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common Stock and preferred stock equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-hundredth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, including, if at the time of such determination there is an Acquiring Person or an Adverse Person, a majority of the Disinterested Directors then in office, or if there are no Disinterested Directors, by a nationally recognized investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement hereof (A) declare declares a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, ; (B) subdivide subdivides or splits the outstanding Common Preferred Stock, ; (C) combine combines or consolidates the outstanding Common Preferred Stock into a smaller number of shares or effects a reverse stock split of its outstanding Preferred Stock; or (D) issue issues any shares of its capital stock in a reclassification of the Common Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, except as otherwise provided in this Section 11(a), then the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares (or fractions thereof) of Common shares of Preferred Stock or capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be becomes entitled to receive receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Common Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to before such date and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company were opendate, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of the Company issuable upon the exercise thereof. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 23 and Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) if any Person (other than an any Exempt Person), shall alone or together with its Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”), unless the event causing such Person to become an Acquiring Person, or
(C) during such time as there Person is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock splita transaction set forth in Section 13(a), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each such case, then proper provision shall be made so that promptly after the Redemption Period, each holder of a Right, Right (except as provided below and in this paragraph (iiSection 7(e), shall ) thereafter have a has the right to receive, upon exercise thereof and payment of such Right at an amount equal to the then current Exercise Price in accordance with the terms of this Agreement, such in lieu of a number of one one-thousandth of a share of Preferred Stock, a number of shares of Common Stock of the Company as shall equal to the result obtained by (xA) multiplying the then current Exercise Price by the then number of one quarter shares one-thousandth of Common a share of Preferred Stock for which a Right was or would have been exercisable immediately prior to before the first occurrence of a Section 11(a)(ii) Event Flip-In Event, whether or not such Right was then exercisable; and (yB) dividing that product (which, following after such first occurrence, shall thereafter be referred to as the "“Exercise Price" ” for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13) by 50% of the Current Per Share Market Price of the Company’s Common Stock (determined pursuant to Section 11(d)) on the date of the such first occurrence of any one of the events listed above in this Section 11(a)(ii) (such number of shares is herein called shares, the "“Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii”). The Company shall not enter into any transaction provide the Rights Agent with written notice of the kind listed in this Section 11(a)(ii) if at the time identity of any such transaction there are any rights, warrants, instruments or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Related Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement nominee or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a), shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunderthe foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.
(iii) In the event that If the number of shares of the Company’s Common Stock which that are authorized by the Company's articles Articles of organization Incorporation, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(iithe foregoing clause (ii), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2) the Exercise Price (such excess is herein called being the "“Spread"”), and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash, ; (2) a reduction in the Exercise Price, ; (3) Common shares or fractions of a share of Preferred Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board has deemed determined to have the same value as shares of the Company’s Common Stock Stock) (such shares or units of shares of preferred stock are equity securities being herein called "Equivalent Common Stock")), (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 based upon the advice of a competent investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of “Common Stock (to the extent available) and then, if necessary, cash, which shares or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"Equivalents”). To the extent that the Company determines that some action need be taken pursuant to the first or second sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) 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 an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For the purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the Current Per Share Market Price of the Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share or per unit value of any Equivalent Common Stock shall be deemed to equal the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock or Equivalent Common Stock or securities convertible into Common Stock or Equivalent Common Stock at a price per share of Common Stock or per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock) less than the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock or Equivalent Common Stock to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); 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 the Company issuable upon the exercise thereof. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Market Price thereof determined in accordance with Section 11(d) hereof. Shares of Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Stock, but including any dividend payable in stock other than Common Stock) or options, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of Common Stock on such record date, less the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such options, subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one share of Common St;
Appears in 1 contract
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock of the Company payable in shares of Common StockStock of the Company, (B) subdivide the outstanding Common StockStock of the Company, (C) combine the outstanding Common Stock of the Company into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification of the Common Stock or recapitalization (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on at such datetime, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date time at the Exercise Price then in effect and at a time when the Common Stock (or other capital stock, as the case may be) transfer books of the Company for such capital stock were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares of Common Stock of the Company for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's charter or articles of organization supplementary but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall take such action as may be necessary to authorize additional shares of Common Stock of the Company for issuance upon exercise of the Rights. In the event that the Company shall, after good faith effort, be unable to take such actions as may be necessary to authorize such additional shares of Common Stock of the Company, the Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "Spread"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or other equity securities securities, if any, of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock which Preferred Stock that the Board of Directors of the Company has deemed determined to have the same value as shares of Common Stock of the Company (such shares or units of shares of preferred stock are equity securities being referred to herein called as "Equivalent Common StockStock Equivalents")), to the extent permitted by the Company's charter or articles supplementary, (2) cash, (3) a reduction in the Exercise Price, (4) debt securities of the Company, (5) other assets, assets or securities of the Company or (6) any combination of the foregoing, foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Adjustment Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) -day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended (with prompt written notice thereof to the Rights Agent) and a public announcement at such time as the suspension is no longer in effecteffect (with prompt written notice thereof to the Rights Agent). For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company on the Section 11(a)(ii) Adjustment Date, Trigger Date and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price of same value as the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Stock of the Company entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase shares of Common Stock of the Company or Equivalent Common Stock Equivalents, or securities convertible into shares of Common Stock of the Company or Equivalent Common Stock Equivalents, at a price per share of Common Stock of the Company or per share of Equivalent Common Stock Equivalents (or having a conversion price per share, if a security convertible into Common Stock of the Company or Equivalent Common StockStock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of Common Stock of the Common Company Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of shares of Common Stock which of the Company that the aggregate offering price of the total number of shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value, and the denominator of which shall be the number of shares of Common Stock of the Company outstanding on such record date, plus the number of additional shares of Common Stock or Equivalent of the Company and/or Common Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereofhereof and shall be described in a written statement filed with the Rights Agent. Shares of Common Stock of the Company owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Stock of the Company (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common StockStock of the Company, but including any dividend payable in stock other than Common StockStock of the Company) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereofhereof and described in a written statement filed with the Rights Agent) per share of Common Stock of the Company on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one distributable in respect of a share of Common Stock of the Company, and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one share of Common StStock of the Company on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share of Common Stock or any other class of stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not including such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the 30 Trading Day period after but not including the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading; or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by NASDAQ or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company, provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction
Appears in 1 contract
Sources: Shareholder Rights Agreement (Bellavista Capital Inc)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights. The Exercise Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Preferred Stock payable in shares of Common Preferred Stock, (B) subdivide the outstanding Common Preferred Stock, (C) combine the outstanding Common Preferred Stock into a smaller number of shares or (D) issue issue, change or alter any shares of its capital stock in a reclassification or recapitalization of the Common Preferred Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), then, except as otherwise provided in this Section 11(a)) and Section 7(e) hereof, the Exercise Price in effect at the time of the record date for such dividend or of the effective date time of such subdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Common Stock or capital stock, as the case may be, stock issuable on such datedate or at such time, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Common Stock or capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Common Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise thereofof a Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 2424 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly alone or indirectly, (1) shall merge into the Company or otherwise combine together with the Company its Affiliates and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of any equity security of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries or otherwise obtain from the Company, with or without consideration, any additional shares of any equity security of the Company or securities exercisable for or convertible into shares of any equity security of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third Person, (4) shall engage in any transaction with the Company involving the sale, purchase, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), other than incidental to the lines of business currently engaged in as of the date hereof by the Company and such Acquiring Person, or Associate or Affiliate, of assets having an aggregate fair market value of more than $5,000,000, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans other than in the ordinary course of business), advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person)Associates, shall become an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, and in each promptly following any such caseoccurrence (a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, except as provided in this paragraph (ii)Section 7(e) hereof, shall thereafter have a right to receive, upon exercise of such Right thereof at the then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-ten-thousandth of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Exercise Price by the then number of one quarter shares one-ten-thousandth of Common a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event Event, whether or not such Right was then exercisable, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Exercise Price" for each Right and for all purposes of this Agreement) by 50% of the Current Per Share Fair Market Price Value per share of Common Stock of the Common Stock Company (determined pursuant to Section 11(d)) on the date of the occurrence of any one of the events listed above in this a Section 11(a)(ii) Event (such number of shares is herein called being referred to as the "“Adjustment Shares"”); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions .
(iii) In lieu of Section 13 hereof, then only the provisions issuing any shares of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not enter into any transaction Common Stock of the kind listed Company in this accordance with Section 11(a)(ii) if at hereof, the time of such transaction there are any rightsCompany, warrants, instruments acting by or securities outstanding or any agreements 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. Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders resolution of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of Directors of the Company has determined is part of a planCompany, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)may, shall become null and void without any further action and no holder or beneficial owner 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 use all reasonable efforts to ensure that the provisions of this Section 11(a) and Section 4(b) hereof are complied with, but shall have no liability to any holder or beneficial owner of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any Affiliates and Associates thereof or any transferee of any of them hereunder.
(iii) In in the event that the number of shares of Common Stock of the Company which are authorized by the Company's articles ’s Certificate of organization Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)(ii11(a), the Company Company, acting by or pursuant to a resolution of the Board of Directors of the Company, shall: (A) determine the excess of (1X) the value Fair Market Value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value"”) over (2Y) the Exercise Price attributable to each Right (such excess is herein called being referred to as the "“Spread"), ”) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a reduction in the Exercise Price, (3) Common Stock of the Company or equity securities, if any, of the Company other equity securities than Common Stock of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock that the Board of Directors of the Company has determined to have the same value as shares of Common Stock of the Company (such shares of Preferred Stock being referred to herein as “Common Stock Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4) Preferred Stock Equivalents which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares or units of shares of preferred stock are herein called "Equivalent Common Stock"))the Company, (45) debt securities of the Company, (56) other assets, assets or securities of the Company or (67) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon of Directors of the Company after receiving the advice of a competent nationally recognized investment banking firm selected by the BoardBoard 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 (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Adjustment Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, shares of Common Stock of the Company (to the extent available) and then, if necessary, cash, which shares or 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 shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day thirty-(30)-day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Adjustment Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is being referred to herein called as the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first or and/or second sentence sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek an any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For the purpose purposes of this Section 11(a)(iii), the value of Adjustment Shares the Common Stock of the Company and of the Preferred Stock shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively, on the Section 11(a)(ii) Adjustment Trigger Date, and the per share or per unit value of any Equivalent Common Stock Equivalent shall be deemed to equal have the Current Per Share Market Price same value as the Common Stock of the Common Company on such date and the value of any Preferred Stock Equivalent (as hereinafter defined) shall be deemed to have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights (other than the Rights)rights, options or warrants to all holders of Common Preferred Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Common Preferred Stock (or Equivalent Common securities having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock (“Preferred Stock Equivalents”)) or securities convertible into Common Preferred Stock or Equivalent Common Preferred Stock Equivalents at a price per share of Common Preferred Stock or per share of Equivalent Common Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into Common Preferred Stock or Equivalent Common StockPreferred Stock Equivalents) less than the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per share of the Common Preferred Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of shares of Common Preferred Stock which the aggregate offering price of the total number of shares of Common Preferred Stock or Equivalent Common and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Fair Market Price Value and the denominator of which shall be the number of shares of Common Preferred Stock outstanding on such record date, plus the number of additional shares of Common Preferred Stock or Equivalent Common and Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one a Right be less than the aggregate par value of the shares of stock of the Company issuable upon the exercise thereofof a Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be the Current Per Share Fair Market Price Value thereof determined in accordance with Section 11(d) hereof. Shares of Common Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise 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 Common Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Common Preferred Stock, but including any dividend payable in stock other than Common Preferred Stock) or optionsconvertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-ten-thousandth of Common a share of Preferred Stock on such record date, less the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such optionsconvertible securities, subscription rights or warrants applicable to one one-ten-thousandth of a share of Common Preferred Stock and the denominator of which shall be the Current Per Share Fair Market Price Value (as determined pursuant to Section 11(d) hereof) per one one-ten-thousandth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of a Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of a Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the “Fair Market Value” of any share of Preferred Stock, Common StStock or any other stock or any Right or other security or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the Fair Market Value on any date shall be deemed to be the average of the daily closing prices per share of such stock or per unit of such other security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the Fair Market Value per share of any share of stock is determined during a period following the announcement by the issuer of such stock of (x) a dividend or distribution on such stock payable in shares of such stock or securities convertible into shares of such stock or (y) any subdivision, combination or reclassification of such stock, and prior to the expiration of the thirty (30) Trading Day period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Fair Market Value shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, if the securities are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the last quoted price (or, if not so quoted, the average of the last quoted high bid and low asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the Pink Sheets or such other system then in use; or, if on any such date no bids for such security are 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 of the Company. If on any such date no market maker is making a market in such security, the Fair Market Value of such security on such date shall be determined reasonably and with utmost good faith to the holders of the Rights by the Board of Directors of the Company; provided, however, that if at the time of such determination there is an Acquiring Person, the Fair Market Value of such security on such date shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, which determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. The term “Trading Day” shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business or, if such security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract