Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence. (iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date. (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 8 contracts
Sources: Rights Agreement (Circuit City Stores Inc), Rights Agreement (Circuit City Stores Inc), Rights Agreement (Circuit City Stores Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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) shallSubject to Section 24 hereof, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price, Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price for a whole share of Common Stock by the then number of one fourone-hundredths tenths of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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, the "Substitution Period"). To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock share equivalent" shall be deemed to have equal the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a current market price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixedCommon Stock.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 3 contracts
Sources: Rights Agreement (Central & South West Corp), Rights Agreement (Central & South West Corp), Rights Agreement (Public Service Co of Oklahoma)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase PriceRestriction against Diminishing Benefits of the Rights)), the number and kind or to effect any sale or other transfer (or to permit one or more of shares covered by each Right and the number of Rights outstanding are subject its Subsidiaries to adjustment from time to time as provided effect any sale or other transfer), in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare one transaction or a dividend on any series of the Preferred Shares payable in Preferred Sharesrelated transactions, (B) subdivide any series of more than 50% of the outstanding Preferred Sharesassets, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares cash flow or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books earning power of the Company were open, he would have owned upon such exercise and been entitled its Subsidiaries (taken as a whole) to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or Persons (other than the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company or and/or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactionstransactions each of which complies with Section 11(o)); (v) to effect the liquidation, to, from, with dissolution or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 winding up of the Company, or (vi) to declare or pay any merger dividend on the shares of Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Company with any shares of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries Common Stock (whether or not with or into by reclassification or otherwise involving an Acquiring Personthan by payment of dividends in Common Stock), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following in each such case, the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision Company shall be made so that give to each holder of a RightRights Certificate, except as provided below to the extent feasible and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with Section 26 (Notices), a notice of such proposed action, which shall specify the terms record date for the purposes of this Agreementsuch stock dividend, in lieu distribution of a number rights or warrants, or the date on which such reclassification, consolidation, merger, statutory share exchange or similar transaction, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of one four-hundredths participation therein by the holders of a Preferred Share, such number of the shares of Circuit City Stock (Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of a Circuit City Rightany action covered by clause (i) or CarMax (ii) above at least twenty (20) calendar days prior to the record date for determining holders of the shares of Preferred Stock (for purposes of such action, and in the case of a CarMax Rightany such other action, at least twenty (20) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately calendar days prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% date of the Current Market Price per share taking of the applicable series of Common Shares (determined pursuant to Section 11(d)) on such proposed action or the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized participation therein by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b))Stock, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which whichever shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madearlier.
Appears in 3 contracts
Sources: Rights Agreement (Commercial Metals Co), Rights Agreement (Toreador Resources Corp), Rights Agreement (Vaalco Energy Inc /De/)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock stock, as the case may be issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, he 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. 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 members of the Company, or any merger or consolidation Board of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or Directors who are not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities officers of the Company or any of its Subsidiaries subsidiaries and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is directly fair to the Company's stockholders and not inadequate (after receiving advice from one or indirectly owned by any Acquiring Person more investment banking firms and taking into account all factors which such members of the Board of Directors deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or any Associate or Affiliate its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of any Acquiring Personthe Company and its stockholders (a "Qualifying Offer"), then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Amended and Restated Certificate of Restatement Incorporation, but which are 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: acting by resolution of the Board of Directors shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock stock, such as the Preferred Stock, which the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called being referred to as "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to defined in Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 2 contracts
Sources: Rights Agreement (Frontline Capital Group), Rights Agreement (Frontline Capital Group)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. (a) The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the date of this Agreement Rights Announcement Date and prior to the Distribution Date (A) declare a dividend on any series the outstanding shares of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred Sharesshares of Common Stock, (C) combine any series of the outstanding Preferred Shares shares of Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger Merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination combination, or reclassification, and the number and kind of shares of capital stock Common 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, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock Common Stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. 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) In Subject to Section 24 hereof, in the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Announcement Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each such Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock issuable upon exercise of one Right. The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing. The Company will use all reasonable efforts to ensure that the Purchase Price provisions of this Section 11(a)(ii) are complied with, but will have no liability to any holder 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. Upon the occurrence of a Section 13 Event, any Rights that shall not have been previously exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only pursuant to Section 13 and the number of Adjustment Shares shall be further adjusted as provided in not pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In the event that the aggregate number of treasury shares plus the number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's ’s Articles of Restatement Incorporation or Certificate of Formation, in either case as amended, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph clause (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cashcash (to the extent permitted by applicable law and any agreements or instruments to which the Company is a party in effect immediately prior to the Stock Acquisition Date), (2) a reduction in the Purchase Price, (3) to the extent available, Common Shares Stock or other equity securities of the Company (includingincluding rights to purchase stock, without limitationor shares, shares or units of shares, of preferred stock that the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed being referred to have the same value as shares of Circuit City “Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"Equivalents”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except Company (to the extent that the Company has not obtained any necessary regulatory approval for such issuanceavailable), (5) other assetsassets (to the extent available), or (6) any combination of the foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value the Current Value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a the Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) hereof expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such 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 and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 11(a)(iii) and give the Rights Agent a copy of such announcement. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share 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 to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) shares of Common Stock (or shares having the same rights, privileges and preferences as the shares of 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 Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and (ii) the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both 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 capital stock issuable upon exercise of one Right. In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Common Stock (including any such distribution made in connection with a consolidation or merger Merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesCommon Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and (ii) the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon 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 issuable 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 madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) The Current Market Price per share of Common Stock on any date shall be deemed to be (i) for the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days immediately prior to, but not including, such date, and (ii) for purposes of computations made pursuant to Section 11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following, but not including, such date; provided, however, that if the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and 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, but not including, the commencement of the requisite 30 Trading Day or 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 ex-dividend trading. The closing price for each Trading Day shall be the last sale price, regular way, or, in case no such sale takes place on such Trading Day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq Global Market or, if the shares of Common Stock are not listed or admitted to trading on the Nasdaq Global Market, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, 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: Rights Agreement (Interphase Corp), Rights Agreement (Interphase Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares securities 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.
(a) (i) In the event the Company shall at any time after the date of this Agreement Rights Dividend Declaration Date (A) declare a dividend on any series of the Series A Junior Participating Preferred Shares Stock payable in shares of Series A Junior Participating Preferred SharesStock, (B) subdivide any series of the outstanding Series A Junior Participating Preferred SharesStock, (C) combine any series of the outstanding Series A Junior Participating Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Series A Junior Participating Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares (or fractions thereof) of Series A Junior Participating Preferred Stock or capital stock 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 entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Series A Junior Participating Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were opendate, he 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 (or fractions thereof) of capital stock of the Company issuable upon exercise of 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).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 2 contracts
Sources: Rights Agreement (Swift Energy Co), Rights Agreement (Swift Energy Co)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase 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 (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination combination, consolidation or reclassification, and the number and kind of shares of capital stock Preferred Stock or other class of shares, 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 entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock Preferred Stock or other class of shares, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, consolidation or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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, shall (1) shall merge into the Company or amalgamate or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger merger, amalgamation or combination and all the Company Common Shares of the Company Stock 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 propertyunchanged, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock Company Common Stock, for other shares of the Company or any of its Subsidiaries such Subsidiary, or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (whether Company Common Stock or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into such shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, as the case may be, the Company or any of its SubsidiariesSubsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than the Company would be able to obtain those that could have been obtained in arm'sarm’s-length negotiation negotiations with an unaffiliated third party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, as the case may be, the Company or any of the Company's ’s Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity (other than incidental to the lines of businesstransactions, if any, consistent with those engaged in in, as of the date hereof between hereof, by the Company and such Acquiring Person or such Associate or Affiliate), assets (including securities) assets having an aggregate fair market value of more than $2 million (US$5,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof), (5) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, any material trademark or material service ▇▇▇▇, other than pursuant to a transaction set forth in Section 13(a), (6) receive, or any designee, agent or representative of such Acquiring Person or any Affiliate or Associate of such Acquiring Person shall receive receive, any compensation from the Company or any of the Company's its Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's ’s (or its Subsidiaries'’) past practices, or (67) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement holder of Company Common Stock or as required by law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, unless the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant event causing such Person to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such become an Acquiring Person and its Associates or Affiliates for cash and (b) is a majority of the Continuing Directors shall have determined that such tender offer is fair, or transaction set forth in Section 13(a); 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 amalgamation, merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person)Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) applyapply (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 or series of equity securities or of securities exercisable for or convertible into securities shares of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, ; then, promptly following immediately upon the date of the occurrence of any an event described in Section 11(a)(ii)(A), (B) or (C) hereof(a “Section 11(a)(ii) Event”), proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at the then then-current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths Units of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that such number of Units of Preferred Stock as shall equal the result obtained by (x) multiplying the then-current Purchase Price by the then number of Units of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event (such product (which productthereafter being, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by Agreement other than Section 13, the “Purchase Price”), and (y) dividing that product by 50% of the Current Market Price per share of the applicable series of Common Shares then-current market price (determined pursuant to Section 11(d)) per Unit of Preferred Stock on the date of such first occurrence (such number Units of shares, Preferred Stock being the "“Adjustment Shares"”); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Preferred Stock or CarMax Stock that are authorized by the Company's Articles ’s Memorandum of Restatement Association and Bye-laws 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, by the Company vote of a majority of the Board of Directors of the Company, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value"”) over (2) the Purchase Price (such excess, excess being the "“Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the such Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Shares Stock or other equity securities shares of the Company (including, without limitation, shares preferred shares, or units of preferred shares of (such other shares being “preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 a majority of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company, after receiving advice from a nationally recognized investment banking firm; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty 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)(ii11(a)(iii) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares Units of Preferred Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares Units of Preferred Stock and/or cash shall have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares a Unit of Preferred Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share Unit of the Common Shares Preferred Stock on the Section 11(a)(ii11(a)(iii) Trigger Date and the value of any "common preferred stock equivalent" equivalent shall be deemed to have the same value as the Common Shares Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five calendar days after such record date) to subscribe for or purchase such shares of Preferred Shares Stock (or shares having substantially the same rights, privileges and preferences as such shares of Preferred Shares Stock ("equivalent preferred shares"“Equivalent Preferred Stock”)) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Equivalent Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesEquivalent Preferred Stock) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the sum of the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of additional such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by a majority of the Board of Directors of the Company, 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. Preferred Shares of such series Preferred 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares Stock (including any such distribution made in connection with a consolidation consolidation, amalgamation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such shares of Preferred SharesStock, but including any dividend payable in shares other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) per share of Preferred Stock on such record date, date less the fair market value (as determined in good faith by a majority of the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) Agent and shall be binding on the Rights Agent and the holder of the portion Rights) of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such distributable in respect of a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d)) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the “current market price” per share of Company Common Stock or Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such shares for the ten consecutive Trading Days immediately prior to (but not including) such date; provided, however, that if prior to the expiration of such requisite ten Trading Day period the issuer announces either (A) a dividend or distribution on such shares payable in such shares or securities convertible into such shares (other than the Rights) or (B) any subdivision, combination or reclassification of such shares, then, following the ex-dividend date for such dividend or the record date for such subdivision, combinations or reclassifications, as the case may be, the “current market price” shall be properly adjusted to take into account such event. The closing price for each day shall be, if the shares are listed and admitted to trading on a national securities exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such shares are listed or admitted to trading or, if such 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 Nas
Appears in 2 contracts
Sources: Rights Agreement (Bunge LTD), Rights Agreement (Bunge LTD)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare de clare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares out standing Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that if the record date for any such dividend, subdivision, combination or reclassification shall occur prior to the Distribution Date, the Company shall make an ap propriate adjustment to the Purchase Price (taking into account any additional Rights which may be issued as a result of such dividend, subdivision, combination or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights. 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, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fairmem bers of the Board who are not officers of the Company and who are not representatives, nominees, Affiliates or (C) during such time as there is Associates of an Acquiring Person, there shall after receiving advice from one or more investment banking firms, to be any reclassification of securities (including any reverse stock split), or recapitalization A) at a price which is fair to stockholders and not inadequate (taking into account all factors which such members of the CompanyBoard 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 involving the Company or any of its Subsidiaries stockholders (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a"Qualified Offer") apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence ▇▇ ▇▇▇▇▇▇▇▇ of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths third shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) 11 Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for with respect to each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, shares is herein called the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events event occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which is authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, excess is herein called the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rightsa Right and payment of the Applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the essentially same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are referred to herein called as "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madthe
Appears in 2 contracts
Sources: Rights Agreement (Cutco Industries Inc), Rights Agreement (Cutco Industries Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend distribution on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any other shares of its capital stock in a reclassification of any series the shares of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend distribution or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or of capital stock in the Company issuable on such date, as the case may be, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effecteffect necessary to exercise a Right in full, the aggregate number and kind of shares of Preferred Stock or of capital stock in the Company, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the shares of Preferred Shares Stock (or shares of capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividenddistribution, subdivision, combination combination, or reclassification. 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) In Subject to Sections 23 and 24 of this Agreement, in the event
event that any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan or any member of the Lebovitz Group), alone or together with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that promptly following the Redemption Period (as defined in Section 23(a)), each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at and payment of an amount equal to the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourten-hundredths thousandths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourten-hundredths thousandths of a share of Preferred Share Stock for which a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right was then exercisable, and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by (y) 50% of the Current Market Price current market price per share of the applicable series of Common Shares Stock (determined pursuant to Section 11(d)) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which is authorized by the Company's Articles Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained the Board shall, to the extent permitted by the Company, applicable law and by material agreements 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 each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) shares of Common Shares Stock or other equity securities of the Company (including, without limitation, shares of Preferred Stock or units of shares of preferred stock Preferred Stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Common Stock, as applicable ) (such shares or units of shares of preferred stock are Preferred Stock being herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares of Common Stock and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series shares of Preferred Shares Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase such shares of Preferred Shares Stock (or shares having the same rights, privileges and preferences as such the shares of Preferred Shares Stock ("equivalent preferred sharesstock")) or securities convertible into such shares of Preferred Shares Stock or equivalent preferred shares stock at a price per Common Share share of Preferred Stock or per share of "equivalent preferred share stock" (or having a conversion price per shareshare of Preferred Stock, if a security convertible into such shares of Preferred Shares Stock or equivalent preferred sharesstock) less than the Current Market Price current per share market price of such the shares of Preferred Shares Stock (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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 RightsRights and shall be conclusive for all purposes. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend or distribution out of the earnings of the Company), assets (other than a dividend distribution payable in such shares of Preferred Shares) Stock, but including any distribution payable in capital stock other than shares of Preferred Stock), or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current per share market price of such the Preferred Shares Stock (as defined in Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current per share market price of such the Preferred SharesStock. Such adjustments adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder (other than computations made pursuant to Section 11(a)(iii) hereof), 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 Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (i) a dividend or distribution on such shares of Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (ii) any subdivision, combination or reclassification of such shares of Common Stock, 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 appropriately adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or
Appears in 2 contracts
Sources: Rights Agreement (CBL & Associates Properties Inc), Rights Agreement (CBL & Associates Properties Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right 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 Except as otherwise provided in this Section 11(a) and in Section 7(e), if the Company shall at any time after the date of this Agreement (A) declare declares a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of subdivides the outstanding Preferred Shares, (C) combine any series of combines the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue issues any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, then the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination combination, or reclassification, as the case may be, and the number and kind of shares of capital stock issuable on such date, shall each will be proportionately adjusted so that the holder of any Right duly exercised after such applicable time shall will be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock whichthat, if such Right had been exercised immediately prior to such date applicable time and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification; provided, however, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 25 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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of if 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with becomes an unaffiliated third party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described and in Section 11(a)(ii)(A), (B) or (C) hereofeach such case, proper provision shall will be made promptly so that that, following the Distribution Date, each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter will have the a right to receive, upon exercise thereof at a price equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall is equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share 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 product, following such first occurrence, shall occurrence will thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, however, that if the Purchase Price 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 will apply and no adjustment will be made pursuant to this Section 11(a)(ii). If any Person shall become an Acquiring Person and the number of Adjustment Shares Rights shall then be further adjusted as provided in this Agreement outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to reflect any events occurring after be afforded by the date of such first occurrenceRights.
(iii) In If the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares that are authorized by the Company's Articles certificate of Restatement incorporation (as amended and in effect as of the relevant time) but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is Rights, are not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any then the Company shall take all such action as may be necessary regulatory approval to authorize additional Common Shares for such issuance has not been obtained by upon exercise of the Company, Rights. If the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each , after good faith effort, be unable to take all such Right (the "Current Value") over (2) the Purchase Price (action as may be necessary to authorize such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment additional Common Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall substitute, for each Common Share that would otherwise be obligated, subject to Section 7(e), to deliver, issuable upon the surrender for exercise of each a Right, a number of Preferred Shares or fraction thereof such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for current per share market price of one Preferred Share multiplied by such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value number or fraction is equal to the Spread. If the Board current per share market price of Directors one Common Share as of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for date of issuance upon exercise in full of such Rights Preferred Shares or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 fraction thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case If the Company shall fix fixes a record date for the issuance of rights, options options, or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same or more favorable rights, privileges privileges, and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price then current per share market price of such the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall will be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall will be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both Preferred 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 will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which may will be in a form other than cash, the value of such consideration shall will be as determined in good faith by the Board of Directors of the Company, whose determination shall will be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Preferred Shares of such series owned by or held for the account of the Company shall will not be deemed outstanding for the purpose of any such computation. Such adjustment shall will 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 Purchase Price shall will be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix fixes a record date for the making of a distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of cash, evidences of indebtedness indebtedness, or other assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall will be the Current Market Price then current per share market price of such the Preferred Shares (as defined in Section 11(d)) 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 will be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness indebtedness, or other assets so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall will be such Current Market Price current per share market price of such the Preferred Shares; provided, however, that in no event will 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 will be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price will again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the "current per share market price" of any Security (a "Security" for the purpose of this Section 11(d)(i)) on any date will be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination, or reclassification of such Security 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, combination, or reclassification, then, and in each such case, the current per share market price will be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day will 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 ("NYSE"), or if the Security is not listed or admitted to trading on the NYSE as reported in the principal consolidated transaction reporting system with respect to securities listed on the American Stock Exchange or other principal national securities exchange on which the Security is listed or admitted to trading, or if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq Automated Quotations System or such other system then in use, or if on any such date the Security is not quoted
Appears in 2 contracts
Sources: Rights Agreement (Waters Corp /De/), Rights Agreement (Waters Corp /De/)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase PriceRestriction against Diminishing Benefits of the Rights)), the number and kind or to effect any sale or other transfer (or to permit one or more of shares covered by each Right and the number of Rights outstanding are subject its Subsidiaries to adjustment from time to time as provided effect any sale or other transfer), in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare one transaction or a dividend on any series of the Preferred Shares payable in Preferred Sharesrelated transactions, (B) subdivide any series of more than 50% of the outstanding Preferred Sharesassets, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares cash flow or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books earning power of the Company were open, he would have owned upon such exercise and been entitled its Subsidiaries (taken as a whole) to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or Persons (other than the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets to the Company or and/or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactionstransactions each of which complies with Section 11. (o)); (v) to effect the liquidation, to, from, with dissolution or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 winding up of the Company, or (vi) to declare or pay any merger dividend on the shares of Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Company with any shares of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries Common Stock (whether or not with or into by reclassification or otherwise involving an Acquiring Personthan by payment of dividends in Common Stock), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following in each such case, the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision Company shall be made so that give to each holder of a RightRights Certificate, except as provided below to the extent feasible and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with Section 26. (Notices), a notice of such proposed action, which shall specify the terms record date for the purposes of this Agreementsuch stock dividend, in lieu distribution of a number rights or warrants, or the date on which such reclassification, consolidation, merger, statutory share exchange or similar transaction, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of one four-hundredths participation therein by the holders of a Preferred Share, such number of the shares of Circuit City Stock (Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of a Circuit City Rightany action covered by clause (i) or CarMax (ii) above at least twenty (20) calendar days prior to the record date for determining holders of the shares of Preferred Stock (for purposes of such action, and in the case of a CarMax Rightany such other action, at least twenty (20) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately calendar days prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% date of the Current Market Price per share taking of the applicable series of Common Shares (determined pursuant to Section 11(d)) on such proposed action or the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized participation therein by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b))Stock, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which whichever shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madearlier.
Appears in 2 contracts
Sources: Rights Agreement (Polymedix Inc), Rights Agreement (Polymedix Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock or other capital stock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares share of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a11(a)(ii) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event
event any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan or employee stock plan of the Company or of any Subsidiary of the Company, any dividend reinvestment plan of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan) alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreementhereof, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner is an acquisition of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Company's Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares Board deem relevant including, without limitation, the long-term prospects and value of Circuit City Stock the Company and CarMax Stock held by any Person other than such Acquiring Person and the prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of (1) the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities Company and its stockholders (including any reverse stock split), or recapitalization the possibility that these interests may best be served by the continued independence of the Company), or any merger or consolidation of (2) the Company's employees, suppliers, creditors, customers and (3) the community in which the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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 Personoperates, then, promptly following the first occurrence of any the event described in this Section 11(a)(ii)(A11(a)(ii), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below in Section 11(a)(iii), and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareStock Fractions, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Stock Fractions for which a Right was exercisable by such holder immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" Price for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, shares of Common Stock is herein called the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient sufficient, or there shall not have been received regulatory approvals necessary, in each case to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if the issuance of such shares would violate any necessary regulatory approval for such issuance has not been obtained by provision in the Company's certificate of incorporation or by-laws, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares preferred shares, or units of shares of preferred stock Preferred Stock Fractions), which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called shares, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later first occurrence of (x) the first occurrence of a Section 11(a)(ii) Event and or (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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended by resolution of the Board of Directors of the Company to the extent necessary, but not more than 90 ninety (90) days after following the first occurrence of a Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, provide subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating, and notify the Rights Agent, that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and notification to the Rights Agent at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any common stock equivalents shall be deemed to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the shares of Common Stock are principally traded would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the shares of Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of shares of Common Stock or for any other reason, the Company shall: (A) determine the Spread and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) equity securities of the Company, including, without limitation, "common stock equivalents," other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of shares of Common Stock or otherwise cause the prohibition described above, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Section 11(a)(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 Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that an action needs to be taken pursuant to the first sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11(a)(iv), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date. The Company shall promptly notify the Rights Agent of any action, determinations or public announcements under this Section 11(a)(iv).
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Stock, (or shares having the same rights, privileges and preferences as such the Preferred Shares Stock ("equivalent preferred sharesPreferred Stock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred share Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesPreferred Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend paid out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesStock, but including any dividend payable in capital stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so maddistributio
Appears in 2 contracts
Sources: Rights Agreement (Omi Corp/M I), Rights Agreement (Omi Corp/M I)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase 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 (A) declare a dividend on any series of the Preferred Shares Company Common Stock payable in Preferred Sharesshares of Company Common Stock, (B) subdivide any series of the outstanding Preferred SharesCompany Common Stock, (C) combine any series of the outstanding Preferred Shares Company Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Company Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Company Common Stock or capital stock 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 entitled to receive, upon payment (if applicable) of the Purchase Price then in effect, the aggregate number and kind of shares of Company Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) 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 all the Company Common Shares of the Company Stock shall remain outstanding and not changed into or exchanged for stock or other securities of unchanged,
(B) any other Person or the Company or cash or any other propertyshall become an Acquiring Person, (2) shall, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a any transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or 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 merger, consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person)Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madof
Appears in 2 contracts
Sources: Rights Agreement (Baker Michael Corp), Rights Agreement (Baker Michael Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares and other 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 (A) declare a dividend on any series security of the Preferred Shares Company payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Shares or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Shares or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Share transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mador
Appears in 2 contracts
Sources: Rights Agreement (Neose Technologies Inc), Rights Agreement (Neose Technologies Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred SharesShares into a greater number of shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of Preferred Shares or shares of capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of Preferred Shares or shares of capital stock whichstock, as the case may be, which he would have owned immediately after such dividend, subdivision, combination or reclassification if he had exercised such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company for the Preferred Shares were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(ASubject to Sections 11(a)(iii) 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 all the Common Shares 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) shall25 hereof, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(iiand (y) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)11(d)(i) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrencePerson became an Acquiring Person.
(iii) In Subject to Section 25 hereof, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles ’s Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) Rights shall providenot be exercisable for Common Shares, subject to but proper provision shall be made so that each holder of a Right, except as provided in Section 7(e) hereof, that such action shall apply uniformly thereafter have a right to all outstanding Circuit City Rights or CarMax Rightsreceive, as upon exercise thereof in accordance with the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes terms of this Section 11(a)(iii), Agreement at the value of the Common Shares shall be the Current Market Price (as price determined pursuant to Section 11(d) hereof) per share the foregoing subparagraph (ii), such number of Common Stock Equivalents (or, in the judgment of the Board of Directors, such combination of Common Stock Equivalents and Common Shares) as shall equal the number of Common Shares on determined pursuant to the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateforegoing subparagraph (ii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("“equivalent preferred shares"”)) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)11(d)(ii) hereof) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or so to be offered and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyDirectors, 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 Rightsconclusive for all purposes. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets indebtedness, cash (other than a regular quarterly cash dividend or dividend), assets, stock (other than a dividend payable in such Preferred Shares) or subscription rights rights, options or warrants (excluding those referred to in or excluded pursuant to Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)11(d)(ii) hereof) per one one-hundredth of a Preferred Share on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyDirectors, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets assets, stock or evidences of indebtedness so to be distributed or of such subscription rights rights, options or warrants applicable to one such one-hundredth of a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d)(ii) hereof) per share one one-hundredth of such a Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) 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 (A) 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 (B) any subdivision, 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, combination or reclassification, then, and in each such case, the “current market price” shall be appropriately 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 Common Shares 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 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 system then in use, or, if on any such date the Common Shares are not so quoted, the average of the closing bid and asked prices as furnished by a professional market maker making a market in
Appears in 2 contracts
Sources: Rights Agreement (Chindex International Inc), Rights Agreement (Chindex International Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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) shallSubject to Section 24, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price, Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price for a whole share of Common Stock by the then number of one fourone-hundredths thousandths of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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, the "Substitution Period"). To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock share equivalent" shall be deemed to have equal the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a current market price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixedCommon Stock.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 2 contracts
Sources: Rights Agreement (American Shared Hospital Services), Rights Agreement (Unicom Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time on or after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall shall, be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i11 (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) In in the event:
(A) any Acquiring Person alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with event causing the Company and the Company shall be the continuing or surviving corporation of such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sellor is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board of Directors, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in after receiving advice from one or more transactions)investment banking firms, toto be (a) at a price which is fair to stockholders (taking into account all factors which the members of the Board deem relevant including, fromwithout limitation, with or of, as the case may be, prices which could reasonably be achieved if the Company or any its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof)its stockholders, (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) the Board of Directors of the Company shall declare any Person shall to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has, at any time after the Rights Dividend Declaration Date, become the Beneficial Owner of an amount of Common Shares representing 15Stock which the Board of Directors determines to be substantial (which amount shall in no event be less than 10% or more of the total Voting Rights shares of all Common Stock then outstanding) and a determination by the Common Shares Board of Directors, after reasonable inquiry and investigation, including consultation with such persons as the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, howeverdirectors shall deem appropriate, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held Beneficial Ownership by any such Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 intended to cause the Company with any of its Subsidiaries to repurchase the Common Stock 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 involving intended to provide such Person with short-term financial gain under circumstances where the Board of Directors determines that the best long term interests of the Company and its stockholders would not be served by taking such action or any of its Subsidiaries (whether or not with or entering into or otherwise involving an Acquiring Person), other than a transaction or such transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities 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 securities exercisable for relationships with customers or convertible into securities impairment of the Company Company's ability to maintain its competitive position) on the business or any prospects of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personthe Company, then, promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (xX) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Trigger, Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need needs to be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("equivalent preferred sharesCommon Stock") or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share Common Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharesCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or
Appears in 2 contracts
Sources: Rights Agreement (Wolohan Lumber Co), Rights Agreement (Wolohan Lumber Co)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i1) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that if the record date for any such dividend, subdivision, combination or reclassification shall occur prior to the Distribution Date, the Company shall make an appropriate adjustment to the Purchase Price (taking into account any additional Rights which may be issued as a result of such dividend, subdivision, combination or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights and the foregoing provisions of this Section 11(a)(i) hereof shall not be applicable. 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.
(ii2) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 24 of this Agreement, directly in the event that any Person, alone or indirectlytogether with its Affiliates or Associates, (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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other becomes 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereofPermitted Offer), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the first occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receivereceive (subject to the last sentence of Section 23(a)), upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal Company that equals the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii3) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's Articles Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b2) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("equivalent preferred sharescommon stock")) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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 Rightsconclusive for all purposes. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c3) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such Preferred Sharesrecord date. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(4) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and the low asked prices in the over-the-counter market, as reported by The Nasdaq Stock Market, Inc. ("Nasdaq") or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term "Trading Day" shall mean a day on which Nasdaq or any national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on Nasdaq or any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board, 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: Rights Agreement (Standex International Corp/De/), Rights Agreement (Standex International Corp/De/)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred SharesShares or other capital stock, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party as determined in good faith by the Board of Directors of the Company (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) any Person (other than the Company, any wholly-owned Subsidiary of the Company or any employee benefit plan of the Company or any Subsidiary of the Company, or any Person holding Common Shares for or pursuant to the terms of any such plan) shall become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except unless the event causing the 20% threshold to be crossed (1) is a recalculation of the voting power of any series of Common Shares made in accordance with the Articles of Restatement; provided, however, that the exception provided by this clause (1) shall no longer apply from and after the first date upon which (i) such Person, or any Affiliate or Associate of such Person, since the date of such recalculation of voting power, shall have acquired Beneficial Ownership of any Common Shares and (ii) such Person, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of Common Shares representing 20% or more of the total Voting Rights of all the Common Shares then outstanding, (2) is a transaction set forth in Section 13(a) hereof, or (3) is an acquisition of Common Shares pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) the price and other terms of such tender offer are determined by at least a majority of the Continuing Directors shall have determined that Directors, after receiving advice from one or more investment banking firms, to be (x) fair to shareholders (taking into account all factors which such tender offer is fairmembers of the Board deem relevant including, without limitation, values indicated in the light of long-term prospects or business plans or aggregate prices or values which could reasonably be achieved if part or all of the Company or its assets were distributed or sold on an orderly basis designed to realize maximum long-term value) and (y) otherwise in the best interests of the Company and its shareholders, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madth
Appears in 2 contracts
Sources: Rights Agreement (Circuit City Stores Inc), Rights Agreement (Circuit City Stores Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Special Stock payable in Preferred Sharesshares of Special Stock, (B) subdivide any series of the outstanding Preferred SharesSpecial Stock, (C) combine any series of the outstanding Preferred Shares Special Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Special Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Special Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Special Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Special Stock transfer books of the Company were open, he or she would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event
event that any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan), alone or together with its Affiliates and Associates, shall, at any time after the date Rights Dividend Declaration Date, become the Beneficial Owner of this Agreement, directly 20% 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 all the Common Shares more 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of Common Stock then outstanding, unless the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of event causing the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution 20% threshold to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths thousandths of a Preferred Shareshare of Special Stock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths thousandths of a Preferred Share share of Special 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Restated Certificate of Restatement Incorporation, as amended, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad,
Appears in 2 contracts
Sources: Rights Agreement (Schulman a Inc), Rights Agreement (Schulman a Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase 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 (A) declare a dividend on any series of the Preferred Shares Company Common Stock payable in Preferred Sharesshares of Company Common Stock, (B) subdivide any series of the outstanding Preferred Sharesshares of Company Common Stock into a greater number of shares, (C) combine any series of the outstanding Preferred Shares shares of Company Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Company Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Company Common Stock or capital stock 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 entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Company Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 34, in the event:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreementhereof, 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 all the Company Common Shares of the Company Stock 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 propertyunchanged, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock Company Common Stock, for other equity securities of the Company or any of its Subsidiaries such Subsidiary, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company or any of its Subsidiaries (whether Company Common Stock or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, as the case may be, the Company or any of its SubsidiariesSubsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than the Company would be able to obtain those that could have been obtained in arm's-length negotiation negotiations with an unaffiliated third party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, as the case may be, the Company or any of the Company's Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity (other than incidental to the lines of businesstransactions, if any, consistent with those engaged in in, as of the date hereof between hereof, by the Company and such Acquiring Person or such Associate or Affiliate), assets (including securities) assets having an aggregate fair market value of more than $2 million (5 million, other than pursuant to a transaction set forth in Section 13(a) hereof), (5) shall receive sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, any material trademark or material service ▇▇▇▇, other than pursuant to a transaction set forth in Section 13(a), (6) shall receive, or any designee, agent or representative of such Acquiring Person or any Affiliate or Associate of such Acquiring Person shall receive, any compensation from the Company or any of the Company's its 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 (67) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement holder of Company Common Stock or as required by law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except an Acquiring Person, other than pursuant to a tender offer made any transaction set forth in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder13(a); provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person)Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) applyapply (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 or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, ; then, promptly following immediately upon the date of the occurrence of any an event described in Section 11(a)(ii)(A11 (a)(ii)(A)-(C) (a "Section 11(a)(ii) Event"), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths shares of Company Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Preferred ShareSection 11 (a)(ii) Event, such number of shares of Circuit City Company Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Company Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (such product thereafter being, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by Agreement other than Section 13, the "Purchase Price"), and (y) dividing that product by 50% of the Current Market Price per share of the applicable series of Common Shares then current market price (determined pursuant to Section 11(d)) hereof) per share of Company Common Stock on the date of such first occurrence (such number shares of shares, Company Common Stock being the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Company Common Stock or CarMax Stock that are authorized by the Company's Articles Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, by the Company vote of a majority of the Independent Directors, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, excess being the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the such Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value values as shares of Circuit City Company Common Stock or CarMax Stock, as applicable (such other shares or units of shares of preferred stock are herein called being "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors a majority of the Company based upon the Independent Directors, after receiving advice of from a nationally recognized investment banking firm selected by the Board of Directors of the Companyfirm; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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)(iii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares shares of Company Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares of Company Common Stock and/or cash shall have an aggregate value equal to the Spread. If the Board of Directors a majority of the Company independent directors shall determine in good faith that it is likely that sufficient additional shares of Company Common Shares could Stock might be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii11(s)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first sentence and/or second sentences sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 even of any such suspension, the Company shall issue a public announcement stating that the exercisability of such Rights the rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a the Company Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share shares of the Company Common Shares Stock on the Section 11(a)(ii11(a)(iii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Company Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Company Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") of Company Common Stock or securities convertible into such Preferred Shares or equivalent preferred shares Company Common Stock at a price per share of Company Common Share or equivalent preferred share (Stock, or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) Company Common Stock, less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Company Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the sum of the number of such Preferred Shares shares of Company Common Stock outstanding on such record date plus the number of such Preferred Shares which shares of Company Common Stock that the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Company Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares shares of Company Common Stock outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both of Company Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors a majority of the CompanyIndependent Directors, 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. Preferred Shares , shares of such series Company 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, issued the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares Company 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred Sharesshares of Company Common Stock, but including any dividend payable in stock other than Company Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Company Common Stock on such record date, date less the fair market value (as determined in good faith by the Board of Directors a majority of the CompanyIndependent Directors, whose determination shall be described in a statement filed with the Rights Agent) Agent and shall be binding on the Rights Agent and the holder of the portion Rights) of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share distributable in respect of a share of Company Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCompany 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 madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market price" per share of Company Common Stock or Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such shares for the 10 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that if prior to the
Appears in 2 contracts
Sources: Rights Agreement (Steel of West Virginia Inc), Rights Agreement (Steel of West Virginia Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend distribution on any series of the Preferred Common Shares payable in Preferred Common Shares, (B) subdivide any series of the outstanding Preferred Common Shares, (C) combine any series of the outstanding Preferred Common Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock member interests in a reclassification of any series of the Preferred Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, then the Purchase Price in effect at the time of the record date for such dividend distribution or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock Common Shares or member interests, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock whichCommon Shares or member interests, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividenddistribution, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madthe
Appears in 2 contracts
Sources: Rights Agreement (Kaneb Services LLC), Rights Agreement (Kaneb Services LLC)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this the Original Rights Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred SharesShares or other capital stock, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the Table of Contents holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such an Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that then each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Eventbefore such event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares Share (determined pursuant to Section 11(d)) on the date of such the first occurrence of such event (such number of shares, the "“Adjustment Shares"”); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares authorized by the Company's ’s Articles of Restatement Incorporation but not outstanding or reserved for Table of Contents issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value"”) over (2) the Purchase Price (such excess, the "“Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such the Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called "“common stock equivalents"”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Table of Contents Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such the Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "“common stock equivalent" ” shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 2 contracts
Sources: Rights Agreement (Circuit City Stores Inc), Rights Agreement (Circuit City Stores Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event If the Company shall at any time after the date of this Agreement (A) declare pays a dividend on any series of the Preferred Shares payable Stock in shares of Preferred SharesStock, (B) subdivide any series of subdivides the outstanding Preferred SharesStock into a greater number of shares, (C) combine any series of combines the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue issues any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which involving the Company is the continuing or surviving corporationCompany), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of immediately prior to the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock issuable on such date, shall be proportionately adjusted so that the each holder of any a Right exercised after such time shall (except as otherwise provided herein, including Section 6(e)) thereafter be entitled to receive, upon payment exercise of such Right at the Purchase Price then in effecteffect immediately prior to such date, the aggregate number and kind of shares of Preferred Stock or other capital stock whichstock, as the case may be, which such holder would have been entitled to receive upon such exercise and by virtue of such dividend, subdivision, combination or reclassification as if such Right had been exercised immediately prior to the record date for such dividend or the effective date and at a time when the Preferred Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require requires an adjustment under both this Section 11(a)(i9(a)(i) and Section 11(a)(ii9(a)(ii), the adjustment provided for in this Section 11(a)(i9(a)(i) shall be in addition to, and shall be made prior to, and in addition to, any adjustment required pursuant to Section 11(a)(ii9(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 2 contracts
Sources: Rights Agreement (MSC Software Corp), Rights Agreement (IHS Inc.)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the effective date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series or recapitalization of the Preferred Shares Common Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or combination, reclassification, or recapitalization and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification, or reclassificationrecapitalization. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, the holder of any Right which has not theretofore been exercised shall thereafter have the right be entitled to receive, upon exercise thereof of such Right at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall Company equal to the result obtained by (x1) multiplying the then current Purchase Price by the then one (or by such other number of one four-hundredths shares of Common Stock then acquirable upon the exercise of a Preferred Share for which a Right was exercisable immediately prior Right, giving effect to the first occurrence of a Section 11(a)(iiany adjustment in such number as provided herein) Event, and (2) dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) on hereof) per share of Common Stock as of the date of such first occurrence (such number of shares, the "Adjustment Shares")Stock Acquisition Date in question; provided, however, that if the Purchase Price transaction that would otherwise give rise to the foregoing adjustment also constitutes an event described in Section 13(a), then only the provisions of Section 13 shall apply and the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In the event that the aggregate number lieu of issuing shares of Circuit City Common Stock or CarMax Stock authorized by in accordance with Section 11(a)(ii) hereof, the Company's Articles ’s Board of Restatement but Directors may, if the Board of Directors determines in its discretion that such action is necessary or appropriate and not outstanding contrary to the interests of holders of Rights, elect to issue or reserved for issuance for purposes other than pay, upon the exercise of the Rights is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as cash (including an offset against the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(aPurchase Price), property, shares of Common Stock, preferred stock, or if other securities or any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) combination thereof having an aggregate value equal to the value of the Adjustment Shares shares of Common Stock which otherwise would have been issuable upon pursuant to Section 11(a)(ii), which value shall be determined by a reputable investment banking firm selected by the exercise Company’s Board of each such Right (Directors. For purposes of the "Current Value") over (2) the Purchase Price (such excesspreceding sentence, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise value of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of any preferred stock which the Board of Directors of the Company has determines to be a “common stock equivalent” shall be deemed to have the same value as shares the Common Stock. Any such election by the Board of Circuit City Directors must be made and publicly announced within 90 days of the relevant Stock or CarMax Stock, as applicable (such shares or units Acquisition Date. Following the occurrence of shares of preferred stock are herein called "common stock equivalents"an event described in Section 11(a)(ii), except the Board of Directors may (as determined in its discretion by the vote of a majority of the Directors then in office) suspend the exercisability of the Rights for a period of up to 90 days following the occurrence of such event to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal determined whether to the Spread. If the Board exercise its rights of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval election under this paragraph (such period, as it may be extended, the "Substitution Period"a)(iii). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case If the Company shall fix fixes a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock) at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per shareshare of Common Stock, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares shares of Common Stock so offered for subscription or equivalent preferred shares or both so to be offered purchase (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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 RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (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) , of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the “current market price” of any share of Common Stock or any other stock or any Right or other security shall be deemed to be the average of the daily closing prices of such 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 current market price of the security is determined during a period following the announcement by the issuer of such security of (A) a dividend or distribution on such security payable in shares of Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination, reclassification, or recapitalization of such security, 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, reclassification, or recapitalization then, and in each such case, the “current market price” shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the 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 the shares of Common Stock are listed or admitted to trading or, if the securities are not listed or admitted to trading on any national securities exchange, the last quoted sale 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 the securities 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 securities selected by the Board of Directors. If on any such date no market maker is making a market in the securities, the fair value of such securities on such date, as determined in good faith by the Board of Directors, shall be used; provided that, if at the time of such determination there is an Acquiring Person, the current market price of such security on such date shall be determined by a reputable 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 the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, “current market price” per share shall mean the fair value per share as determined in good faith by the Board of Directors provided that, if at the time of such determination there is an Acquiring Person, the current market price of such security on such date shall be determined by a reputable 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, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of this Agreement of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(ASubject to Section 23(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 all the Common Shares 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) shallSection 24, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number one share of one four-hundredths of a Preferred ShareCommon Stock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, shares is herein called the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a)) and the Rights shall become so exercisable, or if to the extent permitted by applicable law and any necessary regulatory approval for such issuance has not been obtained by agreements in effect on the Companydate hereof to which the Company is a party, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock if available which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof)) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares Stock on such date. The Board of Directors may, but shall not be required to, establish procedures to allocate the right to receive Common Stock upon the exercise of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("equivalent preferred sharesEquivalent Common Stock")) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares Equivalent Common Stock at a price per share of Common Share Stock or equivalent preferred per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharesEquivalent Common Stock) less than the Current Market Price per share of such Preferred Shares (as defined in determined pursuant to Section 11(d)) per share of Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock (and/or Equivalent Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock 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). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other then Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in determined pursuant to Section 11(d)) per share of Common Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d)) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date dated is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii), the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date and for purposes of computations made pursuant to Section 11(a)(iii), the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the then ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to the principal national securities exchange or the Nasdaq National Market on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or the Nasdaq National Market the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange or the Nasdaq National Market on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "Current Market Price" per share shall mean the fair value per share as determined in good faith by the board of Directors of the Company, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he 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 exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 24 of this Agreement, directly or indirectly, (1) in the event any Person 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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other become 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in any Section 13(a) hereof13 Event occurring after the Distribution Date or within 15 days prior thereto), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in subject to Section 7(e11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company’s Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price occurrence. From and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the “Adjustment Date"”), the Company does not have sufficient issued but not outstanding or reserved, or authorized, unissued and unreserved, Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Exercise Price (as determined pursuant to Section 11(ddefined below) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Common Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or delivered by the aggregate initial conversion price Company upon exercise of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which a Right shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase further adjusted as provided in this subparagraph (or into which the convertible securities so to be offered are initially convertibleiii). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Rights Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation consolidation, merger or merger other business combination in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of on the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both 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).
(ii) In the event
(A) , any Acquiring Person Person, alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this Rights 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described and in Section 11(a)(ii)(A), (B) or (C) hereofeach such case, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e) hereof), shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Rights Agreement, in lieu of a number shares of one four-hundredths of a Preferred ShareStock, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to before the first occurrence of a an event described in Section 11(a)(ii) Event), and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price current per share market price of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, shares being referred to as the "Adjustment Shares"); , provided, however, that if the Purchase Price 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 the number of Adjustment Shares no adjustment shall be further adjusted as provided made pursuant to this Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence of an event listed above in this Agreement to reflect subparagraph (ii), any events occurring Rights that are or were on or after the earlier of the Distribution Date or the date any Person, alone or together with its Affiliates and Associates, shall, at any time after the date of this Rights Agreement, become an Acquiring Person, beneficially owned by the Acquiring Person or any Associate or Affiliate of the Acquiring Person shall become void and any holder of such first occurrenceRights shall thereafter have no right to exercise such Rights under any provision of this Rights Agreement. Any Rights Certificate issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Rights Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and any Rights Certificate issued pursuant to Section 6 or this Section 11 to any of the foregoing upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the legend set forth in Section 4(b) hereof.
(iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if two-thirds of the Disinterested Directors determine that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by ) and the CompanyRights become so exercisable, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") ), over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares shares, or units or fractions of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares shares, or units or fractions of shares shares, of preferred stock are herein called referred to in this Rights Agreement as "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm expert selected by the Board of Directors of the Company; provided, however, if the Company shall not have made be required to make adequate provision to deliver value pursuant to clause (B) above above, and shall not have done so within 30 thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) hereof or the first date on which that the Company's right of redemption to redeem the Rights pursuant to Section 23(a) expires (the later of (x) and (y) being referred 23 hereof, as such date may be amended pursuant to herein as the "Section 11(a)(ii) Trigger Date")26 hereof, shall expire, then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such Right a Rights Certificate and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares securities and/or cash assets that in the aggregate have an aggregate a value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not to more than 90 ninety (90) days after following the first occurrence of an event described in Section 11(a)(ii) Trigger Datehereof, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, period as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price of Common Shares (as determined pursuant to Section 11(d) hereof) per share on the later of the Common Shares on date of the first occurrence of an event described in Section 11(a)(ii) Trigger Date hereof and the first date that the right to redeem the Rights pursuant to Section 23 hereof, as such date may be amended pursuant to Section 26 hereof, shall expire and the value of any "common stock equivalentCommon Shares equivalents" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the event the Company shall fix a record date for the issuance of rights, options rights or warrants to all holders of any series of Preferred Shares Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase such shares of Preferred Shares Stock (or shares having the same rights, privileges and preferences as such shares of Preferred Shares Stock ("equivalent preferred sharesstock") )), or securities convertible into such Preferred Shares Stock or equivalent preferred shares stock at a price per Common Share share of Preferred Stock or equivalent preferred share stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesstock) less than the Current Market Price current per share market price of such the Preferred Shares Stock (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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 RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the event the Company shall fix a record date for the making of a distribution to all holders of any series of the Preferred Shares Stock (including any such distribution made in connection with a consolidation consolidation, merger or merger other business combination in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly periodic cash dividend or a dividend payable in such Preferred SharesStock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current per share market price of such the Preferred Shares Stock (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such share of Preferred Share Stock and the denominator of which shall be such Current Market Price current per share market price of such the Preferred SharesStock (as defined in Section 11(d)). Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current per share market price" of any security on any date shall be deemed to be the average of the daily closing prices per share of such security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "current per share market price" of any security on any date shall be deemed to be the average of the daily closing prices per share of such security for ten (10) consecutive Trading Days (as such term is hereinafter defined) immediately following such date; provided, however, that in the event that the current per share market price of the security is determined during a period following the announcement by the issuer of such security of (A) a dividend or distribution on such security payable in shares of such security or securities convertible into such shares (other than the Rights which are the subject of this Rights Agreement) or (B) any subdivision, combination or reclassification of such security, and prior to the expiration of thirty (30) Trading Days or ten (l0) Trading Days, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current per share market price" shall be appropriately adjusted to reflect the current market price per share equivalent of such security. 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 principal national securities exchange on which the security is listed or admitted to trading or, if the security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the security, the fair value of the security on such date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the security is listed or admitted to trading is open for the transaction of business or, if the security is not listed or admitted to trading on any national securities exchange, a Business Day. If the security is not publicly held or not so listed or traded, "current per share market price" shall mean the fair value per share 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.
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock or other capital stock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares share of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a11(a)(ii) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event
event any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan or employee stock plan of the Company or of any Subsidiary of the Company, any dividend reinvestment plan of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan) alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreementhereof, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall event causing such threshold to be the continuing or surviving corporation of such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner is an acquisition of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares Board deem relevant including, without limitation, the long-term prospects and value of Circuit City Stock the Company and CarMax Stock held by any Person other than such Acquiring Person and the prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of (1) the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities Company and its stockholders (including any reverse stock split), or recapitalization the possibility that these interests may best be served by the continued independence of the Company), or any merger or consolidation of (2) the Company's employees, suppliers, creditors, customers and (3) the community in which the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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 Personoperates, then, promptly following the first occurrence of any the event described in Section 11(a)(ii)(A), (B) or (C11(a)(ii) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below in Section 11(a)(iii), and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareStock Fractions, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Stock Fractions for which a Right was exercisable by such holder immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" Price for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, shares of Common Stock is herein called the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient sufficient, or there shall not have been received regulatory approvals necessary, in each case to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares preferred shares, or units of shares of preferred stock Preferred Stock Fractions), which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called shares, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later first occurrence of (x) the first occurrence of a Section 11(a)(ii) Event and or (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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended by resolution of the Board of Directors of the Company to the extent necessary, but not more than 90 ninety (90) days after following the first occurrence of a Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, provide subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any common stock equivalents shall be deemed to have the same value as the Common Shares Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the shares of Common Stock are principally traded would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the shares of Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of shares of Common Stock or for any other reason, the Company shall: (A) determine the Spread and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) equity securities of the Company, including, without limitation, "common stock equivalents," other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of shares of Common Stock or otherwise cause the prohibition described above, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Section 11(a)(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 Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that an action needs to be taken pursuant to the first sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order 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 purposes of this Section 11(a)(iv), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares and other 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 (A) declare a dividend on any series security of the Preferred Shares Company payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Shares or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Shares or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Share transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event:
(A1) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this AgreementStock Acquisition Date, 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 all the Common Shares of the Company or other equity securities 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 propertyoutstanding, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of any class or series of capital stock other equity securities of the Company or any of its Subsidiaries Company, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company (Common Shares or any of its Subsidiaries otherwise) or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) on an 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets having an aggregate fair market value of more than $5,000,000 in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (), other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B2) any Person shall (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights of all the Common Shares then outstanding, unless the event causing the 20% threshold to be crossed is a Section 13 Event, or is an acquisition of the Company then outstanding except Common Shares pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding Common Shares at a price and on terms that provide fair value to all shareholders, as determined by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined Directors, after taking into consideration all factors that such tender offer is fairMembers of the Board of Directors deem relevant, including, without limitation, the long-term prospects and value of the Company and the prices and terms that such members of the Board of Directors believe, in good faith, could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value, or
(C3) 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a Section 13 Event or series of such Events (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which that has the effect, directly or indirectly, of increasing by more than 1% it the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareShare Fractions, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Fractions 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares that are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares of the same or a different class or other equity securities of the Company (including, without limitation, preferred shares or units of preferred shares of preferred stock which the Board of Directors that a majority of the Company Continuing Directors in office at the time has deemed (based, among other things, on the dividend and liquidation rights of such preferred shares) to have substantially the same economic value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called shares, hereinafter referred to as "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors a majority of the Company based upon Continuing Directors in office at the time after considering the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 The Company shall issue make a public announcement stating that when the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at and again when such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" share equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) b. In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series any-security of Preferred Shares the Company 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or per equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Company, the Rights Agent and the holders of the Rights. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) c. In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness indebtedness, cash (other than a regular quarterly dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend referred to above or a dividend payable in such Preferred Shares, but including any, dividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, less the then 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to section 11(a)(iii) hereof, 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 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to section 11(a)(iii) hereof, 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 ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. (a) The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11...
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding shares of Preferred SharesStock, (C) combine any series of or consolidate the outstanding shares of Preferred Shares Stock into a smaller number of Preferred Shares shares, through a reverse stock split or otherwise, or (D) issue any shares of its capital stock in a reclassification of any series or recapitalization of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationPerson), except as otherwise provided in this Section 11(a11.(a) and Section 7(e7.(e) hereof, then, in each such case, the Purchase 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 of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock transfer books of the Company were open, he 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. If an event occurs which that would require an adjustment under both this Section 11(a)(i11.(a)(i) and Section 11(a)(ii)11.(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i11.(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii)11.(a)(ii) hereof.
(ii) In Subject to Section 24. hereof, in the event
(A) event that any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a(13)(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), 7.(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths thousandths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then then- current Purchase Price by the then number of one fourone-hundredths thousandths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii11.(a)(ii) Event, and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by [fifty percent (y) 50% %)] of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)11.(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); provided. The Company shall provide the Rights Agent with written notice of the identity of any Acquiring Person, that Associate or Affiliate, or the Purchase Price nominee of any of the foregoing, and the number of Adjustment Shares Rights Agent may rely on such notice in carrying out its duties under this Agreement, and shall be further adjusted as provided in this Agreement deemed not to reflect have any events occurring after knowledge of the date identity of any such first occurrenceAcquiring Person, Associate or Affiliate, or the nominee of any of the foregoing unless and until it shall have received such notice.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Common Stock authorized by the Company's Articles ’s [Restated] Certificate of Restatement Incorporation, as may be amended from time to time, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11.(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) seek stockholder approval for the authorization of such additional shares, if the Board 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 or (B) (x) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (By) with respect to each such RightRight (subject to Section 7.(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (includingincluding shares, without limitation, shares or units of shares shares, of preferred stock which stock, such as the Preferred Stock, that the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are equity securities being referred to herein called "common stock equivalents"as “Common Stock Equivalents”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period")Board. To the extent that the Company determines that some action need should be taken pursuant to the first and/or second sentences sentence of this Section 11(a)(iii11.(a)(iii), the Company (x1) shall provide, subject to Section 7(e7.(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 (with prompt written notice thereof to the Rights Agent) stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement (with prompt written notice thereof to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11.(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii11.(a)(iii)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as the Current Market Price per share of Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series shares of Preferred Shares 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 such shares of Preferred Shares Stock (or shares having the same rights, privileges and preferences as such the shares of Preferred Shares Stock ("equivalent preferred shares"“Equivalent Preferred Stock”)) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Equivalent Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11.(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares which Stock that the aggregate offering price of the total number of such shares of Preferred Shares or equivalent preferred shares or both so Stock and/or Equivalent Preferred Stock to be so offered (or and/or the aggregate initial conversion price of the convertible securities so to be so offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be so offered are initially convertible). In case such subscription price may be paid in a consideration by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and that shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Preferred Shares 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 or assets cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesStock, but including any dividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b)11.(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11.(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a written statement filed with the Rights AgentAgent that 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 subscription rights or warrants applicable to one such a share of Preferred Share Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11.(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11.(a)(iii) hereof, the “Current Market Price” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the [thirty (30)] consecutive Trading Days 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 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 (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 is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination, consolidation, reverse stock split or reclassification of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, consolidation, reverse stock split 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 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 (the “NYSE”)] or, if the shares of Common Stock are not listed or admitted to trading on the [NYSE], as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the
Appears in 1 contract
Sources: Shareholder Rights Agreement
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that if the record date for any such dividend, subdivision, combination or reclassification shall occur prior to the Distribution Date, the Company shall make an appropriate adjustment to the Purchase Price (taking into account any additional Rights which may be issued as a result of such dividend, subdivision, combination or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights and Section 11(i) hereof shall not be applicable. 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, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event:
(A) any Acquiring Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan), alone or together with its Affiliates and Associates, shall, at any time after the date Rights Dividend Declaration Date, become the Beneficial Owner of this Agreement, directly 15% 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 all the Common Shares more 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of Common Stock then outstanding, unless the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of event causing the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution 15% threshold to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sellor is an acquisition of shares of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company and who are not representatives, purchasenominees, leaseAffiliates or Associates of an Acquiring Person, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in after receiving advice from one or more transactions)investment banking firms, toto be (a) at a price which is fair to shareholders (taking into account all factors which such members of the Board deem relevant, fromincluding, with or ofwithout limitation, as the case may be, prices which could reasonably be achieved if the Company or any its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof)its shareholders, (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) the Board of Directors of the Company shall declare any Person shall to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has, at any time after this Agreement has been filed with the Securities and Exchange Commission as an exhibit to a filing under the Exchange Act, become the Beneficial Owner of a number of shares of Common Shares representing 15% or more Stock which the Board of the total Voting Rights of all the Common Shares Directors of the Company then outstanding except pursuant determines to a tender offer made be substantial (which number of shares shall in the manner prescribed by Section 14(d) no event represent less than 10% of the Exchange Act outstanding shares of Common Stock) and a determination by the rules Board of Directors of the Company, after reasonable inquiry and regulations promulgated thereunder; providedinvestigation, howeverincluding consultation with such persons as such directors shall deem appropriate and consideration of such factors as are permitted by applicable law, that (a) such tender offer shall provide for Beneficial Ownership by such Person is intended to cause the acquisition of all of Company to repurchase the outstanding shares of Circuit City Common Stock and CarMax Stock held beneficially owned by any such Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 to cause pressure on the Company with any of its Subsidiaries to take action or any other enter into a transaction or series of transactions involving intended to provide such Person with short-term financial gain under circumstances where the Board of Directors determines that the best long-term interests of the Company would not be served by taking such action or any of its Subsidiaries (whether or not with or entering into or otherwise involving an Acquiring Person), other than a such transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities 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 securities exercisable for relationships with customers or convertible into securities impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company, on the Company's employees, customers or suppliers or on the communities in which the Company operates or any of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personlocated, then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (CB) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) 11 Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for with respect to each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, shares is herein called the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events event occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which is authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, excess is herein called the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such the Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are referred to herein called as "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) 11 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need should be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval securities 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the Common Stock ("equivalent preferred sharescommon stock")) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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 AgentAgent 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 subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of the 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of the Common Stock of (i) any dividend or distribution on such Common Stock, payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (ii) any subdivision, combination or reclassification of such Common Stock, 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 expiration of the requisite thirty (30) Trading Day period 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 ex-dividend trading. The closing price for each day shall be the last sale price, r
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock or other capital stock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares share of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a11(a)(ii) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event
event any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan or employee stock plan of the Company or of any Subsidiary of the Company, any dividend reinvestment plan of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan) alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreementhereof, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall event causing such threshold to be the continuing or surviving corporation of such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner is an acquisition of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares Board deem relevant including, without limitation, the long-term prospects and value of Circuit City Stock the Company and CarMax Stock held by any Person other than such Acquiring Person and the prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of (1) the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities Company and its stockholders (including any reverse stock split), or recapitalization the possibility that these interests may best be served by the continued independence of the Company), or any merger or consolidation of (2) the Company's employees, suppliers, creditors, customers and (3) the community in which the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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 Personoperates, then, promptly following the first occurrence of any the event described in Section 11(a)(ii)(A), (B) or (C11(a)(ii) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below in Section 11(a)(iii), and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareStock Fractions, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Stock Fractions for which a Right was exercisable by such holder immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" Price for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, shares of Common Stock is herein called the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient sufficient, or there shall not have been received regulatory approvals necessary, in each case to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares preferred shares, or units of shares of preferred stock Preferred Stock Fractions), which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called shares, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later first occurrence of (x) the first occurrence of a Section 11(a)(ii) Event and or (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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended by resolution of the Board of Directors of the Company to the extent necessary, but not more than 90 ninety (90) days after following the first occurrence of a Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, provide subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect (in each case with prompt notice thereof to the Rights Agent). For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any common stock equivalents shall be deemed to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the shares of Common Stock are principally traded would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the shares of Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of shares of Common Stock or for any other reason, the Company shall: (A) determine the Spread and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) equity securities of the Company, including, without limitation, "common stock equivalents," other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of shares of Common Stock or otherwise cause the prohibition described above, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Section 11(a)(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 Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that an action needs to be taken pursuant to the first sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order 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 purposes of this Section 11(a)(iii11(a)(iv), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Stock, (or shares having the same rights, privileges and preferences as such the Preferred Shares Stock ("equivalent preferred sharesPreferred Stock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred share Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesPreferred Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock to be offered for subscription or purchase (or into onto which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend paid out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesStock, but including any dividend payable in capital stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "curren
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, he 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. 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 members of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or Board who are not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities officers of the Company or any of its Subsidiaries which is directly subsidiaries and who are not representatives, nominees, Affiliates or indirectly owned by any Acquiring Person or any Associate or Affiliate Associates of any an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to the Company's stockholders and not inadequate (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 its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its stockholders (a "Qualifying Offer"); then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Amended and Restated Certificate of Restatement Incorporation, but which are 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: acting by resolution of the Board shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed being referred to have the same value as shares of Circuit City "Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalentsEquivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to defined in Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, 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 all the Common Shares first public announcement 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock declaration of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of Rights dividend, become an Acquiring Person, unless the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution event causing such Person to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the later of the occurrence of any such event described in Section 11(a)(ii)(A), (B) or (C) hereofand the Record Date, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, Agreement such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each such Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); providedprovided that, that for the avoidance of doubt, the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence. The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person or any of its Affiliates, Associates, or the nominee of any of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing, unless and until it shall have received such notice.
(iii) In the event that the aggregate number of treasury shares plus the number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's ’s Amended and Restated Articles of Restatement Incorporation, as amended, but not outstanding outstanding, subscribed for, or reserved or otherwise committed for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph clause (ii) of this Section 11(a), ) or if any necessary regulatory approval for such issuance has not been obtained by the CompanyBoard shall so elect, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which that the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"securities being referred to as “Common Stock Equivalents”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval stockholder approval, if necessary, for the authorization and/or of such additional shares or take action to obtain such regulatory approval (such 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 and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 11(a)(iii) and give the Rights Agent a copy of such announcement. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as Current Market Price per share of the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") Common Stock or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares which shares of Common Stock that the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Common Stock (including without limitation any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets ), cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(d) The Current Market Price per share of Common Stock on any date shall be deemed to be (1) for the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days immediately prior to, but not including, such date, and (2) for purposes of computations made pursuant to Section 11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for the 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 the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and 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, but not including, the commencement of the requisite 30 Trading Day or 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 ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, 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 OTC Bulletin Board service or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 24 of this Agreement, directly in the event any Person shall become an Acquiring Person (other than (A) pursuant to any Section 13 Event occurring after the Distribution Date or indirectly, within 15 days prior thereto or (1B) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation as a result of such merger or combination and all the an acquisition of Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer tender offer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation exchange offer 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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the outstanding Common Shares of the Company then and for all outstanding except pursuant to Exchangeable Shares held by Persons other than the Company or a tender offer made in Subsidiary at a price (which shall be the manner prescribed same per-share price for both the Common Shares and the Exchangeable Shares) and on terms determined by Section 14(d) the Board of Directors of the Exchange Act and the rules and regulations promulgated thereunder; providedCompany, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at a time when a majority of the directors then serving are Continuing Directors shall have determined that such tender offer is fairand after receiving advice from one or more investment banking firms, or to be (C1) during such time as there is an Acquiring Person, there shall be any reclassification fair to stockholders (taking into account all factors which the Board of securities (including any reverse stock splitDirectors deems relevant), or recapitalization and (2) otherwise in the best interests of the Company and its stockholders and which the Board of Directors determines to recommend to the stockholders of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in subject to Section 7(e11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price occurrence. From and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or to any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the "Adjustment Date"), then the Company shall be obligateddoes not have sufficient issued but not outstanding or reserved or authorized, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right unissued and without requiring payment of the Purchase Price, unreserved Common Shares (available to permit the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such all Rights or that any necessary regulatory approval are exercisable on the Adjustment Date for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the number of Common Shares per Right provided for in Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), then the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Exercise Price (as determined pursuant to Section 11(ddefined below) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Common Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or delivered by the aggregate initial conversion price Company upon exercise of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which a Right shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase further adjusted as provided in this subparagraph (or into which the convertible securities so to be offered are initially convertibleiii). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event If the Company shall at any time after the date of this Agreement (A) declare pay a dividend on any series of the Preferred Shares Series B Preference Stock payable in Preferred Sharesshares of Series B Preference Stock, (B) subdivide any series of the outstanding Preferred SharesSeries B Preference Stock into a greater number of shares, (C) combine any series of the outstanding Preferred Shares Series B Preference Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Series B Preference Stock (including any such reclassification in connection with a consolidation consolidation, merger, share exchange or merger in which division involving the Company is the continuing or surviving corporationCompany), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of immediately prior to 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 Series B Preference Stock or other capital stock issuable on such date, date shall be proportionately adjusted so that the each holder of any a Right exercised after such time shall (except as otherwise provided herein, including Section 7(d)) thereafter be entitled to receive, upon payment of exercise thereof at the Purchase Price then in effecteffect immediately prior to such date, the aggregate number and kind of shares of Series B Preference Stock or other capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares applicable transfer books of the Company were open, he such holder would have owned been entitled to receive upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) If any Acquiring Person Person, alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this Agreement, directly or indirectly, become an Acquiring Person (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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall promptly be made so that each holder of a Right, Right shall (except as otherwise provided below and in herein, including Section 7(e7(d), shall ) thereafter have the right be entitled to receive, upon exercise thereof on or after the Distribution Date at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event, in lieu of Series B Preference Stock, such number of duly authorized, validly issued, fully paid and dividing that nonassessable shares of Common Stock of the Company (such shares being referred to herein as the “Adjustment Shares”) as shall be equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase Price in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event by the number of one one-hundredth (1/100th) of a share of Series B Preference Stock for which product, following a Right was exercisable immediately prior to such first occurrence, shall occurrence (such product being thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by by
(y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d11(d)(i)) per share of Common Stock on the date of such first occurrence (such number of shares, occurrence; provided that if the "Adjustment Shares"); provided, transaction that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement would otherwise give rise to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except adjustment is also subject to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities provisions of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date")13, then only the Company shall be obligated, subject to provisions of Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action 13 shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to no adjustment shall 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 such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11(a)(ii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof11 (a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effectPrice(and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act event any Person, alone or together with its Affiliates and the rules and regulations promulgated thereunder; providedAssociates, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)below, shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right would otherwise be then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was would otherwise be then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of such first occurrence (such number of shares, 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); and provided further that the Purchase Price and the number of Adjustment Shares adjustment set forth in this Section 11(a)(ii) shall be effective only at and after the time at which the authority of the Board of Directors of the Company to redeem the Rights pursuant to Section 23(b), as such Section may be amended pursuant to Section 27, shall have terminated. Notwithstanding the foregoing, in the event any Person shall become an Acquiring Person, any Rights that are or, after becoming an Acquiring Person, were beneficially owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall become null and void at the time of such event without any further adjusted as provided in action, and no holder of such Rights shall thereafter have any right to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to reflect Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any events occurring after Associate or Affiliate of any Acquiring Person whose Rights would be void pursuant to the date preceding sentence; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such first occurrenceAcquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if the Company's Board of Directors determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment such Common Shares, upon exercise of such the Rights, (including, without limitation, full payment of the Purchase Price)
(1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called "common stock share equivalents")), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event Distribution Date and (y) the date on which the Company's right of redemption pursuant to Section 23(a23(b) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such the Rights 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 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to the second paragraph of Section 7(e11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability exercisabitity of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d) hereof)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current per share market price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving corporation or in a statutory share exchange) of evidences of indebtedness or cash or non-cash assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d)) hereof) 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) of the portion of the cash, assets or evidences of indebtedness or cash or non-cash assets so to be distributed on, or of such subscription rights or warrants applicable to to, one such Preferred Share and the denominator of which shall be such Current Market Price current per share market price of such the Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is record date had not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such not been fixed.
(d) (i) for the purpose of any computation hereunder, the "current per share market price" of any Security (a "Security" for the purpose of this Section 11(d) (i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such Security (other than the Rights), or (B) any subdivision, combination or reclassification of such Security, 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, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. 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 Security is 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 the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the fair value of such shares on such date as determined in good faith by the Board of D
Appears in 1 contract
Sources: Rights Agreement (Jostens Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares Preferred 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 Corporation shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, including by means of a stock split, (C) combine any series of or consolidate the outstanding Preferred Shares into a smaller number of Preferred Shares Shares, including by way of a reverse stock split, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, 7(g); then the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination combination, consolidation or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of capital stock which, if had such Right had been exercised immediately prior to such date time and at a time when the Preferred Shares transfer books of the Company Corporation were open, he such holder would have owned received upon such exercise and would have been entitled to receive by virtue of such dividend, subdivision, combination 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 capital stock of the Corporation issuable upon exercise of one Right. The adjustment provided for in the next preceding sentence shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination, consolidation or reclassification is effected. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 24, in the event
(A) event any Person 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 all the Common Shares 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 propertyevent, (2a “Section 11(a)(ii) shall, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), Right shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall price equal the result obtained by (x) multiplying to the then current Purchase Price multiplied by the then number of one fourone-hundredths of a Preferred Share for which a Right was exercisable immediately prior to is then exercisable, in accordance with the first occurrence terms of this Agreement and in lieu (in both cases) of Preferred Shares, such number of Common Shares as shall equal the quotient of (A) the product of the then current Purchase Price times the number of one one-hundredths of a Section 11(a)(ii) Event, and dividing that product (Preferred Share for which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each a Right and for all purposes of this Agreement) is then exercisable divided by (yB) 50% of the then Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Share for which a Right is exercisable on the date of the occurrence of such first occurrence (such number of sharesevent. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the "Adjustment Shares"); provided, that Corporation shall not take any action which would eliminate or diminish the Purchase Price and benefits intended to be afforded by the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrenceRights.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Available Common Shares is not sufficient insufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any the Corporation shall take all such action as may be necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 thereofRights. In the event of any the Corporation shall, after good faith effort, be unable to take all such suspensionaction as may be necessary to authorize such additional Common Shares, the Company Corporation shall issue substitute, for each Common Share that would otherwise be issuable upon exercise of a public announcement stating Right, a number of Preferred Shares or fraction thereof such that the exercisability current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Preferred Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateor fraction thereof.
(b) In case the Company Corporation shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (Shares, or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares") “Equivalent Preferred Shares”), or securities convertible into such Preferred Shares or equivalent preferred shares Equivalent Preferred Shares at a price per Common Preferred Share or equivalent preferred share Equivalent Preferred Share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred sharesEquivalent Preferred Shares) less than the Current Market Price per share of such a Preferred Shares (as defined in Section 11(d)) Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal the sum of (i) the number of such Preferred Shares and Equivalent Preferred Shares outstanding on such record date date, plus (ii) the number of Preferred Shares and Equivalent Preferred Shares underlying securities outstanding on such record date which are convertible into Preferred Shares or Equivalent Preferred Shares, plus (iii) the number of Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both and Equivalent Preferred Shares so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be equal the sum of (x) the number of such Preferred Shares and Equivalent Preferred Shares outstanding on such record date, plus (y) the number of Preferred Shares and Equivalent Preferred Shares underlying securities outstanding on such record date which are convertible into Preferred Shares or Equivalent Preferred Shares, plus (z) the number of additional such Preferred Shares or equivalent preferred shares or both and Equivalent Preferred 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 capital stock of the Corporation issuable upon exercise of one Right. In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Shares of such series owned by or held for the account of the Company Corporation shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and and, in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company Corporation shall fix a record date for the making of a dividend or distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation) of evidences of indebtedness or assets indebtedness, cash (other than a regular quarterly or other periodic cash dividend out of the earnings or retained earnings of the Corporation), assets (other than a dividend payable in such Preferred Shares, but including any dividend payable in shares of capital stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equals the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Share on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share Share, and the denominator of which shall be equals such Current Market Price per share Price; provided, however, that in no event shall the consideration to be paid upon the exercise of such Preferred Sharesone Right be less than the aggregate par value of the shares of capital stock of the Corporation to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and and, in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) Subject to Section 11(d)(iii), for the purpose of any computation hereunder, the current market price of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date of determination shall be deemed to be the arithmetic mean of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately preceding but not including such date, provided, however, that, in the event that the Current Market Price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares (other than, in the case of the Preferred Shares, the Rights), or (B) any split, subdivision, consolidation, combination or reclassification of such Security but prior to the expiration of the requisite 30 Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such split, subdivision, consolidation, combination or reclassification, then, and in each such case, the Current Market Price shall be appropriately adjusted to take into account ex-dividend trading.
(ii) The closing price of a Security on a given date of determination shall be determined in the following order of preference (unless the Board reasonably determines that a different order would yield more accurate results): (i) if such Security is listed or admitted to trading on a national securities exchange or trading market, the last sale price, regular way, or, in case no such sale takes place on such date, the arithmetic mean of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system for such securities exchange or trading market, (ii) if such Security is quoted on a national automated quotation system or in the over-the-counter market, the last quoted price or, if not so quoted, the arithmetic mean of the high bid and low asked prices, as reported by Nasdaq or such other system then in use, (iii) if one or more professional market-makers is making a market in such Security on such date, the arithmetic mean of the closing bid and asked prices as furnished by such a professional market-maker selected by the Board, or (iv) otherwise, the fair value of the Security at the Close of Business on such date as determined in good faith 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 holders of the Rights).
(iii) For the purpose of any computation hereunder, the Current Market Price of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded, the Current Market Price of the Preferred Shares shall be conclusively deemed to be the Current Market Price of the Common Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one one-hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, the Current Market Price of Preferred Shares 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.
(e) Anything herein to the contrary notwithstanding, no adjustment to the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 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 one-millionth of a Preferred Share or one ten-thousandth of any other share or security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment, and (ii) the date of the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a) or Section 13, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Corporation other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through Section 11(c), inclusive, Section 11(g) through Section 11(k), inclusive, Section 11(m) and the provisions of Section 7, Section 9, Section 10, Section 13 and Section 14 with respect to the Preferred Shares shall apply mutatis mutandis to any such other shares.
(g) All Rights originally issued by the Corporation subsequent to any adjustment made to the Purchase Price hereunder shall constitute the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and Section 11(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter constitute the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a Preferred Share equal to the quotient of (A) the product of (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment, times (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, divided by (B) the Purchase Price in effect immediately after such adjustment of the Purchase Price.
(i) The Corporation may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment to the number of one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment to the number of Rights shall be exercisable for the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare de clare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that if the record date for any such dividend, subdivision, combination or reclassification shall occur prior to the Distribution Date, the Company shall make an appropriate adjustment to the Purchase Price (taking into account any additional Rights which may be issued as a result of such dividend, subdivision, combination or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights. 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, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) 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 AgreementRights Dividend Declaration Date, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be or become an Acquiring Person, unless the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fairmembers of the Board who are not officers of the Company and who are not representatives, nominees, Affiliates or (C) during such time as there is Associates of an Acquiring Person, there shall after receiving advice from one or more investment banking firms, to be any reclassification of securities (including any reverse stock split), or recapitalization A) at a price which is fair to stockholders (taking into account all factors which such members of the CompanyBoard 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 involving the Company or any of its Subsidiaries stockholders (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a"Qualified Offer") apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths quarter shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) 11 Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for with respect to each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, shares is herein called the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events event occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which is authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, excess is herein called the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such the Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are referred to herein called as "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) 11 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need should be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval securities and/or to decide de cide 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the Common Stock ("equivalent preferred sharescommon stock")) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Shares of such series Common Stock owned by or held for the account of the Company shall not be deemed outstanding outstand ing for the purpose of any such computation. Such adjustment ad justment 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights rights, options or warrants (excluding those referred to in Section 11(b)) hereof that allow purchases for a period expiring within forty-five (45) calendar days after such record date), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent 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 subscription rights rights, options or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereun der, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of the 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of the Common Stock of (i) any dividend or distribution on such Common Stock, payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (ii) any subdivision, combination or reclassification of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall occur during the
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that if the record date for any such dividend, subdivision, combination or reclassification shall occur prior to the Distribution Date, the Company shall make an appropriate adjustment to the Purchase Price (taking into account any additional Rights which may be issued as a result of such dividend, subdivision, combination or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights and Section 11(i) hereof shall not be applicable. 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, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) 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 AgreementRights Dividend Declaration Date, directly or indirectlyshall become an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 members of the Company, or any merger or consolidation Board of Directors who are not officers of the Company with any and who are not representatives, nominees, Affiliates or Associates of its Subsidiaries an Acquiring Person or any other transaction the Person or series Persons making the tender offer or exchange offer, after receiving advice from one or more investment banking firms, to be (A) at a price which is fair to stockholders (taking into account all factors which such members of transactions involving the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or any of its Subsidiaries assets were sold on an orderly basis designed to realize maximum value) and (whether or not with or into or B) otherwise involving an Acquiring Person), other than a transaction or transactions to which in the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities best interests of the Company or any of and its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Personstockholders, then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) 11 Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madthe
Appears in 1 contract
Sources: Rights Agreement (Sunrise Technologies International Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Sources: Rights Agreement (Proassurance Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares and other 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 (A) declare a dividend on any series security of the Preferred Shares Company payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Shares or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Shares or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Share transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this AgreementStock Acquisition Date, 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 all the Common Shares of the Company or other equity securities 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 propertyoutstanding, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of any class or series of capital stock other equity securities of the Company or any of its Subsidiaries Company, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company (Common Shares or any of its Subsidiaries otherwise) or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets having an aggregate fair market value of more than $5,000,000 in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (), other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (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 stockholder and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) any Person shall (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights of all the Common Shares then outstanding, unless the event causing the 20% threshold to be crossed is a Section 13 Event, or is an acquisition of the Company then outstanding except Common Shares pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding Common Shares at a price and on terms that provide fair value to all stockholders, as determined by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined members of the Board of Directors, after taking into consideration all factors that such tender offer is fairmembers of the Board of Directors deem relevant, including, without limitation, the long-term prospects and value of the Company and the prices and terms that such members of the Board of Directors believe, in good faith, could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value, 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a Section 13 Event or series of such Events (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which that has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareShare Fractions, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Fractions 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares that are authorized by the Company's Articles Certificate of Restatement Incorporation, as amended, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares of the same or a different class or other equity securities of the Company (including, without limitation, preferred shares or units of preferred shares that a majority of preferred stock which the members of the Board of Directors of in office at the Company time has deemed (based, among other things, on the dividend and liquidation rights of such preferred shares) to have substantially the same economic value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called shares, hereinafter referred to as "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 a majority of the members of the Board of Directors of in office at the Company based upon time after considering the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 The Company shall issue make a public announcement stating that when the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at and again when such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock share equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series security of Preferred Shares the Company 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or per equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Company, the Rights Agent and the holders of the Rights. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness indebtedness, cash (other than a regular quarterly dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend referred to above or a dividend payable in such Preferred Shares, but including any dividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, less the then 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, 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 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 ten (10) consecutive Trading Days immediately following s
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Rights Dividend Declaration Date (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock Preferred Stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In Subject to Section 24 of this Agreement, in the event
event any Person (A) any Acquiring Person other than an Exempt Person), alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any such event described in (a "Section 11(a)(ii)(A11(a)(ii) Event"), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a share of Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, shares is herein called the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence; and provided, further, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by ) and the CompanyRights shall become so exercisable, the Company shall, to the extent permitted by applicable law and regulation: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (computed using the current market price used to determine the number of Adjustment Shares) (the "Current Value") over (2) the Purchase Price (such excessexcess is herein referred to as, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsthe Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares nonvoting common stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Common Stock, as applicable ) (such shares or units of shares of preferred stock other equity securities are herein called referred to as, "common stock value equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, cash which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" equivalent shall be deemed to have the same value as the Common Shares Stock on such date. The Board of Directors may, but shall not be required to, establish procedures to allocate the right to receive Common Stock upon the exercise of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Stock (or shares having the same rights, privileges and preferences as such the shares of Preferred Shares Stock ("equivalent preferred sharesstock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares stock at a price per Common Share share of Preferred Stock or per share of equivalent preferred share stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesstock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares which Stock that the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock so to be offered (or the aggregate initial conversion price of into which the convertible securities so to be offeredoffered are initially convertible) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing surviving corporation) of evidences of indebtedness or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesStock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock 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 on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the dividend of the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such a day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ/NMS or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, 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 (or one one-hundredth of a share) of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d). If the current market price per share (or one one-hundredth of a share) of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the "current market price" per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately a
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Special Stock payable in Preferred Sharesshares of Special Stock, (B) subdivide any series of the outstanding Preferred SharesSpecial Stock, (C) combine any series of the outstanding Preferred Shares Special Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Special Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Special Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Special Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Special Stock transfer books of the Company were open, he or she would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event
event that any Person (A) other than the Company, any Acquiring Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or any Associate entity organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan), alone or together with its Affiliates and Associates, shall, at any time after the date Rights Dividend Declaration Date, become the Beneficial Owner of this Agreement, directly 15% 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 all the Common Shares more 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of Common Stock then outstanding, unless the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of event causing the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution 15% threshold to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths thousandths of a Preferred Shareshare of Special Stock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths thousandths of a Preferred Share share of Special 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Restated Certificate of Restatement Incorporation, as amended, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock special stock, such as the Special Stock, which the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred special stock are herein called being referred to as "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Sources: Rights Agreement (Schulman a Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 24, in the event
(A) event any Person 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 all event being referred to as the Common Shares 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, “Flip-in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then then-current Purchase Price, Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths shares of a Preferred ShareCommon Stock otherwise receivable upon exercise, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (xA) multiplying the then then-current Purchase Price for a whole share of Common Stock by the then number of one four-hundredths halves of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(iiFlip-in Event and (B) Event, and dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's Articles ’s Amended and Restated Certificate of Restatement Incorporation, as the same may be amended from time to time, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuanceCompany, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Companyin good faith; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x1) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y2) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x1) and (y2) being referred to herein as the "Section 11(a)(ii) “Flip-in Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), to may deliver, upon the surrender for exercise of each such a Right and without requiring payment of the applicable Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) 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 and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madequal
Appears in 1 contract
Sources: Rights Agreement (Trecora Resources)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In A "Section 11(a)(ii) Event" shall be deemed to occur in the event
(A) event any Acquiring Person Person, alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly . Promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, acquire upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreementthereof, in lieu of a number of one four-hundredths of a Preferred Share, such the number of shares of Circuit City Common Stock (in theretofor purchasable upon exercise and at the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number theretofor in effect, a total of one four-hundredths three (3) shares of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" Common Stock for each Right and for all purposes of this Agreement) by (y) such Right, at a price per share equal to 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Sources: Rights Agreement (Optelecom Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares and other 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 (A) declare a dividend on any series security of the Preferred Shares Company payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Shares or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Shares or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Share transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i11 (a)(i) and Section 11(a)(ii11 (a)(ii), the adjustment provided for in this Section 11(a)(ithis
(a) (i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii11 (a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this AgreementStock Acquisition Date, directly or indirectly, shall (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 all the Common Shares of the Company or other equity securities 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 propertyoutstanding, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of any class or series of capital stock other equity securities of the Company or any of its Subsidiaries Company, or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or such equity securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof)13 event, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets having an aggregate fair market value of more than $5,000,000 in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (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 and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage advantages provided by the Company or any of its Subsidiaries, or ; or
(B) any Person shall become an Acquiring Person unless the Beneficial Owner event causing such Person to become an Acquiring Person is a Section 13 Event, or is an acquisition of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding Common Shares at a price and on terms determined by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined Board, after receiving advice from one or more nationally recognized investment banking firms, to be in the best interests of the Company and its shareholders (a "Qualifying Offer"), a fter taking into consideration all factors that the Board deems relevant, including, without limitation, effects upon employees, upon suppliers of the Company and upon the communities in which offices or other establishments of the Company are located, the long-term prospects and value of the Company and the prices and terms that such tender offer is fairmembers of the Board believe, in good faith, could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value; 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a Section 13 Event or series of such Section 13 Events (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which that has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths Preferred Share Fractions for which a Right was exercisable immediately prior to the first occurrence of a Preferred ShareSection 11(a)(ii) Event, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Preferred Share Fractions as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Fractions 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 product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares then current market price (as defined in and determined pursuant to Section 11(d)) per Preferred Share Fraction on the date of such first occurrence (such number of sharesoccurrence. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the "Adjustment Shares"); provided, that Company shall not take any action which would eliminate or diminish the Purchase Price benefits intended to be afforded by the Rights. From and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date any Person, alone or together with its Affiliates and Associates, shall become an Acquiring Person, any Rights that are or were acquired or beneficially owned by such Acquiring Person (or any Associate or Affiliate of such first occurrenceAcquiring Person) shall be void and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant to this Agreement that represents Rights beneficially owned by an Acquiring Person (or any Associate or Affiliate thereof) whose Rights would be void pursuant to the preceding sentence; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person (or any Associate or Affiliate thereof) whose Rights would be void pursuant to the preceding sentence or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person (or any Associate or Affiliate thereof) whose Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Preferred Shares that are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by should the CompanyBoard so elect, the Company shall: (A) determine the excess of (1) the value of the Adjustment Preferred Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Preferred Shares, upon exercise payment of such Rightsthe applicable Purchase Price, any one or more of the following having an aggregate value determined by the Board to be equal to the Current Value: (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares of the same or a different class or other equity securities of the Company (including, without limitation, preferred shares or units of preferred shares of preferred stock which that the Board of Directors of the Company has deemed (based, among other things, on the dividend and liquidation rights of such preferred shares) to have substantially the same economic value as shares of Circuit City Stock or CarMax Stock, as applicable Preferred Shares (such preferred shares or units of shares of herein after referred to as "preferred stock are herein called "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) such events being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii11 (a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii11 (a)( iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 make a public announcement stating that when the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at and again when such time as the suspension is no longer in effect. The Company shall notify the Rights Agent of the suspension of the exercisability of the Rights, and provide the Rights Agent with a copy of such public announcement. For purposes of this Section 11(a)(iii11 (a)(iii), the value of the Common Preferred Shares shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share of the Common Shares Preferred Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock preferred share equivalent" shall be deemed to have the same value as the Common Preferred Shares on such date.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series security of Preferred Shares the Company 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or per equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d11 (d)) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible convert ible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Company, the Rights Agent and the holders of the Rights. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness indebtedness, cash (other than a regular quarterly dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend referred to above or a dividend payable in such Preferred Shares, but including any dividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) per Preferred Share on such record date, less the then fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d)) per share of such Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the "current market price" of any securi
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event
event any Person (A) other than the Company, any Acquiring Person Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Associate Person organized, appointed or Affiliate established by the Company for or pursuant to the terms of any Acquiring Personsuch plan), alone or together with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that then each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths halves of a Preferred Shareshare of Common Stock, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths halves of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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, the "Substitution Period"). To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend distribution on any series of the Preferred Common Shares payable in Preferred Common Shares, (B) subdivide any series of the outstanding Preferred Common Shares, (C) combine any series of the outstanding Preferred Common Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock member interests in a reclassification of any series of the Preferred Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, then the Purchase Price in effect at the time of the record date for such dividend distribution or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock Common Shares or member interests, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock whichCommon Shares or member interests, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividenddistribution, subdivision, combination or reclassification. 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) 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 entity of such merger or combination and all the Common Shares 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 propertyunchanged, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock Common Shares, for member interests of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock member interests of the Company (Common Shares or any of its Subsidiaries otherwise) or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries member interests or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries member interests (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (15,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) any Person shall (other than the Company, any Subsidiary of the Company, Kaneb Services, Inc. (until June 29, 2001), any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Distribution Declaration Date, become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights of all the Common Shares then outstanding, unless the event causing the 20% threshold to be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of the Company then outstanding except Common Shares pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding Common Shares at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) such tender offer shall provide for the acquisition of all at a price that is fair to shareholders of the outstanding shares Company (taking into account all factors which such members of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and the Board of Directors deem relevant including, without limitation, prices that could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of the Continuing Directors shall have determined that such tender offer is fairCompany and its shareholders, or or
(C) during such time as there is an Acquiring Person, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person)Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply, which apply (whether or not with or into or otherwise involving an Acquiring Person) that has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following five (5) days after the date of the occurrence of an event described in Section 11(a)(ii)(B) hereof and promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then then-current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then then-number of one four-hundredths of a Preferred Share Common Shares 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Common Shares 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 such Preferred Common Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible or exercisable into such Preferred Common Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security is convertible into such Preferred Shares or equivalent preferred sharesCommon Shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Common Share on such record date, then the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Common Shares outstanding on such record date date, plus the number of such Preferred Common Shares which that the aggregate offering price of the total number of such Preferred Common Shares or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Common Shares outstanding on such record date date, plus the number of additional such Preferred Common Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyDirectors, 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. Preferred Common Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; , and in the event that if such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Common Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationentity) of evidences of indebtedness or assets indebtedness, cash (other than a the regular quarterly cash dividend or a dividend payable in such Preferred Shares) distribution made pursuant to Section 8.3 of the Company's Limited Liability Company Agreement), assets or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Common Share on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred a Common Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Common Share on such Preferred Sharesrecord date. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose 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 thirty (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 Share of (A) a distribution on such Common Share payable in Common Shares or securities convertible into Common Shares (other than the Rights), or (B) any subdivision, combination or reclassification of Common Shares, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-distribution date for such distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-distribution trading so as to include the value of the distribution. 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 Common Shares 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 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 data 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 Board of Directors shall be used. 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, 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 Directors, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase 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 that the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Series A Preferred Shares payable in Series A Preferred Shares, (B) subdivide any series of the outstanding Series A Preferred Shares, (C) combine any series of the outstanding Series A Preferred Shares into a smaller number of Series A Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Series A Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of capital stock whichthat, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an ; provided, however, that in no event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), shall the adjustment provided for in this Section 11(a)(i) shall consideration to be in addition to, and shall paid upon the exercise of one Right be made prior to, any adjustment required pursuant to Section 11(a)(ii)less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.
(ii) In the eventevent that
(A) any Acquiring Person or (other than the Company, 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 all the Common Shares Subsidiary of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of Company, 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock employee benefit plan of the Company or of any Subsidiary of its Subsidiaries the Company, or for securities exercisable any entity organized, appointed or established by the Company for or convertible into shares pursuant to the terms of any class such plan), alone or series together with its Affiliates and Associates, shall become the Beneficial Owner of capital stock 15% or more of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its SubsidiariesCommon Shares then outstanding, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a (i) any transaction set forth in Section 13(a) hereof)hereof or (ii) any transaction that, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental pursuant to the lines provisos of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a1(a) hereof), (5) shall receive any compensation from the Company does not cause such Person to be 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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 become an Acquiring Person; or
(B) a majority of the Board shall declare any Person shall to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has become the Beneficial Owner of an amount of Common Shares representing 15% or more which a majority of the total Voting Rights Board determines to be substantial (which amount shall in no event be less than 10% of all the Common Shares then outstanding) and a determination by a majority of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act Board after reasonable inquiry and the rules and regulations promulgated thereunder; providedinvestigation, howeverincluding consultation with such Person as such directors shall deem appropriate, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held Beneficial ownership by any such Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 intended to 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 involving intended to provide such Person with short-term financial gain under circumstances where the Board determines that the best long-term interests of the Company and its stockholders would not be served by taking such action or any of its Subsidiaries (whether or not with or entering into or otherwise involving an Acquiring Person), other than a such transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities transactions at that time or (b) such Beneficial Ownership is causing or is reasonably likely to cause a material adverse impact (including, but not limited to, impairment of securities exercisable for relationships with customers or convertible into securities suppliers, impairment of the Company's ability to maintain its competitive position, adverse consequences to the communities in which the Company is located and impairment of the short-term and long-term interests of the Company (including benefits that may accrue from the continued independence of the Company) on the business or any prospects of its Subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, the Company; then, promptly following the occurrence of any event described and in Section 11(a)(ii)(A), (B) or (C) hereofeach such case, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number Series A Preferred Shares, and subject to the provisions of one four-hundredths of a Preferred ShareSection 11(a)(iii) below, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.of
(iii) In the event that (x) the aggregate number total of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement Common Shares that are issued but not outstanding or and authorized but unissued (excluding Common Shares reserved for issuance for purposes pursuant to the specific terms of any indenture, option plan or other than upon exercise of the Rights agreement) is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with Section 11(a)(ii) hereof or (y) the foregoing subparagraph (iitotal number of Common Shares available for exercise of the Rights in accordance with Section 11(a)(ii) hereof is sufficient to permit the exercise in full of this the Rights in accordance with Section 11(a), or if any necessary regulatory approval for 11(a)(ii) but the Board determines that such issuance has exercise of the Rights will not been obtained by afford adequate protection to the Company, shareholders of the Company and that shareholders should be given an option to acquire a substitute for the Adjustment Shares, and subject to such limitations as are necessary to prevent a default under any agreement for money borrowed to which the Company is a party and to comply with applicable law, then the Board shall: (A) determine the excess of (1) the value value, based upon the current per share market price of the Common Shares (determined pursuant to Section 11(d) hereof), of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for for, or provide an election to acquire in lieu of, the Adjustment Shares, upon exercise payment of the applicable Purchase Price (which term shall include any reduced Purchase Price) any combination of the following having an aggregate value equal to the Current Value (such Rights, aggregate value to be determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board): (1) cash, (2) a reduction in the Purchase Price, (32) Common Shares or and/or other equity securities of the Company (including, without limitation, shares or units of shares of any series of preferred stock which that the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares share of preferred stock are herein called hereinafter referred to as "common stock Common Share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and/or (43) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) and/or cash and other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date")Triggering Event, then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares securities and/or cash have an in the aggregate value are equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after following the Section 11(a)(ii) Trigger Datefirst occurrence of a Triggering Event, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need needs to be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the date of the first occurrence of a Triggering Event. The provisions of this Section 11(a)(ii11(a)(iii) Trigger Date shall apply only to Common Shares of the Company and shall not apply to the value securities of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateother Person.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Series A Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Series A Preferred Shares (or shares having the same rights, privileges and preferences as such the Series A Preferred Shares ("equivalent preferred shares")) or securities convertible into such Series A Preferred Shares or equivalent preferred shares at a price per Common Series A Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Series A Preferred Shares or equivalent preferred shares) less than the Current Market Price current per share market price of such the Series A Preferred Shares (as defined in Section 11(d)) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Series A Preferred Shares outstanding on such record date plus the number of such Series A Preferred Shares which that the aggregate offering price of the total number of such Series A Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Series A Preferred Shares outstanding on such record date plus the number of additional such Series A Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Series A Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of the Series A Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness any debt securities, cash or assets (other than a regular quarterly cash dividend or a dividend payable in such Series A Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current per share market price of such the Series A Preferred Shares (as defined in Section 11(d)) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and binding on the holders of Rights) of the portion of the cash, assets or evidences of indebtedness debt securities so to be distributed or of such subscription rights or warrants applicable to one such Series A Preferred Share and the denominator of which shall be such Current Market Price current per share market price of such the Series A Preferred SharesShares (as determined pursuant to Section 11(d) hereof). Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the "current per share market price" of the Common Shares on any date shall be deemed to be the lesser of (x) the average of the daily closing prices per Common Share for the 30 consecutive Trading Days immediately prior to such date or (y) the average of the daily closing prices per Common Share for the 30 consecutive Trading Days immediately following such date; provided, however, that in the event that the current per share market price of the Common Shares is determined during a period following the announcement by the issuer of such Common Shares of a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights), or any subdivision, combination or reclassification of such Common Shares, and prior to the expiration of 20 Trading Days after the ex-dividend date for such dividend or distribution, then, and in each such case, the current market price shall be appropriately adjusted to reflect the current market price per Common Share equivalent. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange, if any, on which the Common Shares are then listed or admitted to trading or, if the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or, if on any such date the Common Shares are not
Appears in 1 contract
Sources: Rights Agreement (Daisytek International Corporation /De/)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect(and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act event any Person, alone or together with its Affiliates and the rules and regulations promulgated thereunder; providedAssociates, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)below, shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right would otherwise be then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was would otherwise be then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of such first occurrence (such number of shares, 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); and provided further that the Purchase Price and the number of Adjustment Shares adjustment set forth in this Section 11(a)(ii) shall be effective only at and after the time at which the authority of the Board of Directors of the Company to redeem the Rights pursuant to Section 23(b), as such Section may be amended pursuant to Section 27, shall have terminated. Notwithstanding the foregoing, in the event any Person shall become an Acquiring Person, any Rights that are or, after becoming an Acquiring Person, were beneficially owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall become null and void at the time of such event without any further adjusted as provided in action, and no holder of such Rights shall thereafter have any right to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to reflect Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any events occurring after Associate or Affiliate of any Acquiring Person whose Rights would be void pursuant to the date preceding sentence; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such first occurrenceAcquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if the Company's Board of Directors determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, of
(1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called "common stock share equivalents")), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event Distribution Date and (y) the date on which the Company's right of redemption pursuant to Section 23(a23(b) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such the Rights 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 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to the second paragraph of Section 7(e11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d) hereof)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current per share market price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving corporation or in a statutory share exchange) of evidences of indebtedness or cash or non-cash assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d)) hereof) 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) of the portion of the cash, assets or evidences of indebtedness or cash or non-cash assets so to be distributed on, or of such subscription rights or warrants applicable to to, one such Preferred Share and the denominator of which shall be such Current Market Price current per share market price of such the Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution's record date had not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such had not been fixed.
(i) For the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such Security (other than the Rights), or (B) any subdivision, combination or reclassification of such Security, 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, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. 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 Security is 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 the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so madquoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used in lieu of the closing price for such date. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Sec
Appears in 1 contract
Sources: Rights Agreement (Celeris Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), ) except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) event that any Person, alone or together with its Affiliates and Associates or otherwise, shall become 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall promptly be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase PricePrice multiplied by the number of Shares of Common Stock for which a Right is then exercisable, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Common Stock for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(iiand (y) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price current market price per share of the applicable series of Common Shares Stock (determined pursuant to Section 11(d)) on the date of such first the occurrence of the Section 11(a) (such number of shares, the "Adjustment Shares")ii) Event; provided, however, that the Purchase Price and Rights shall not be exercisable hereunder (a) until after the number of Adjustment Shares shall be further adjusted Distribution Date as provided in this Agreement Section 7(a) hereof, (b) until the expiration of any applicable redemption period as provided in Section 23(a), and (c) if the event causing such Person to reflect any events occurring after the date of become an Acquiring Person is a transaction set forth in Section 13(a) hereof, then such first occurrenceprovisions shall apply.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles ’s certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess proper provision shall promptly be made so that each holder of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such a Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction except as provided in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rightsshall, as in the case may be, and (y) may suspend the exercisability of such Rights until the expiration discretion of the Substitution Period Company’s Board of Directors, thereafter have a right to receive, upon exercise thereof in order to seek any authorization accordance with the terms of additional sharesthis Agreement, to take any action to obtain any required regulatory approval and/or to decide such number of Common Stock Equivalents or the appropriate form maximum number of distribution to be made pursuant shares of Common Stock available for issuance to such first sentence and to determine the holder at a reduced Purchase Price which reflects a per share Purchase Price of 50% of current market value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateabove.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants (other than the Rights) to all holders of any series of Preferred Shares Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares Common Stock (or shares securities having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("“equivalent preferred shares"common stock”)) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion or exercise price per share, if a security convertible into such Preferred Shares or exercisable for Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Common 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 indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or convertible securities, subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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 AgentAgent and shall be binding on the Rights Agent and the holders of Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such convertible securities, subscription rights or warrants applicable to one such Preferred Share share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, 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 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 share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the “current market price” shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, 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 shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or traded is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, “current market price” per share shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, or, if at the time of such determination there is an Acquiring Person, by 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 conclusive for all purposes.
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon the exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock (or other capital stock stock, as the case may be) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock (or other capital stock, as the case may be) transfer books of the Company were open, he the holder of such Right would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification. 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 to, Section 11(a)(ii)) hereof.
(ii) In the event
event (Aa "Section 11(a)(ii) Event") that any Acquiring Person (other than an Exempt Person), alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliateis (A) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, 13 Event or (B) any Person shall become the Beneficial Owner an acquisition of shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares Stock of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock and CarMax Stock held of the Company determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer Outside Directors, after receiving advice from one or more investment banking firms, to be (1) at a price which is fair, 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 fair to the Company's stockholders (taking into account all factors which such Outside Directors 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 (2) otherwise in the best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following after the date of occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-one- hundredths of a share of Preferred Share 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 (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of Common Stock of the applicable series of Common Shares (determined pursuant to Section 11(d)) Company on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In lieu of issuing only shares of Common Stock of the Company in accordance with Section 11(a)(ii) hereof, the Company, acting by resolution of the Board, may, and in the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock of the Company which are authorized by the Company's Articles Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, acting by resolution of the Company shall: Board, shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price attributable to each Right (such excess, the "Spread"), ) and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for all or a portion of the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company other than Common Stock of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board which, when added to any shares of Directors of the Company Common Stock issued upon such exercise, has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable of the Company (such shares or units of shares of preferred stock are herein called stock, "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoingforegoing which, having when added to any shares of Common 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 nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty 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) hereof, as such date may be amended pursuant to Section 26 hereof, expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock of the Company (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock of the Company could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-thirty day period set forth above may be extended to the extent necessary, but not more than 90 ninety days after following the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock of the Company shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock of the Company on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares Stock of the Company on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five calendar days after such record date) to subscribe for or purchase such Preferred Shares Stock (or shares having the same rights, privileges and preferences as such the shares of Preferred Shares Stock ("equivalent preferred sharesEquivalent Preferred Stock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Equivalent Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesEquivalent Preferred Stock) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock and/or Equivalent Preferred Stock which the aggregate offering subscription or purchase price of the total number of such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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 Rightsconclusive for all purposes. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesStock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights) or (B) any subdivision, combination, consolidation, reverse stock split or reclassification of such Common Stock, and prior to the expiration of the requisite thirty Trading Day or ten Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, consolidation, reverse stock split or reclassification, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system or by the Nasdaq National Market with respect to securities listed or admitted to trading on another national securities exchange or quoted by the Nasdaq National Market, respectively, or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or quoted by the Nasdaq National Market, 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 Nasdaq Stock Market or such other quotation system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date the Common Stock is not publicly held or not so listed, traded or quoted, and no market maker is making a market in the Common Stock, 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 purposes of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or not so listed, traded or quoted in a manner described in clause (i) of this Section 11(d), the Current Market Pr
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred SharesShares into a greater number of shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of Preferred Shares or shares of capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of Preferred Shares or shares of capital stock whichstock, as the case may be, which he would have owned immediately after such dividend, subdivision, combination or reclassification if he had exercised such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company for the Preferred Shares were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(ASubject to Sections 11(a)(iii) 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 all the Common Shares 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) shall25 hereof, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(iiand (y) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)11(d)(i) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrencePerson became an Acquiring Person.
(iii) In Subject to Section 25 hereof, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles ’s Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) Rights shall providenot be exercisable for Common Shares, subject to but proper provision shall be made so that each holder of a Right, except as provided in Section 7(e) hereof, that such action shall apply uniformly thereafter have a right to all outstanding Circuit City Rights or CarMax Rightsreceive, as upon exercise thereof in accordance with the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes terms of this Section 11(a)(iii), Agreement at the value of the Common Shares shall be the Current Market Price (as price determined pursuant to Section 11(d) hereof) per share the foregoing subparagraph (ii), such number of Common Stock Equivalents (or, in the judgment of the Board of Directors, such combination of Common Stock Equivalents and Common Shares) as shall equal the number of Common Shares on determined pursuant to the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateforegoing subparagraph (ii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("“equivalent preferred shares"”)) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)11(d)(ii) hereof) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or so to be offered and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyDirectors, 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 Rightsconclusive for all purposes. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets indebtedness, cash (other than a regular quarterly cash dividend or dividend), assets, stock (other than a dividend payable in such Preferred Shares) or subscription rights rights, options or warrants (excluding those referred to in or excluded pursuant to Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)11(d)(ii) hereof) per one one-hundredth of a Preferred Share on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyDirectors, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets assets, stock or evidences of indebtedness so to be distributed or of such subscription rights rights, options or warrants applicable to one such one-hundredth of a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d)(ii) hereof) per share one one-hundredth of such a Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) 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 (A) 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 (B) any subdivision, 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, combination or reclassification, then, and in each such case, the “current market price” shall be appropriately adjusted to take into
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 24, in the event
(A) event any Person becomes an Acquiring Person or any Associate or Affiliate of any Acquiring Person(such event, 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 all the Common Shares 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, a “Flip-in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then then-current Purchase Price, Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths shares of a Preferred ShareCommon Stock otherwise receivable upon exercise, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then then-current Purchase Price for a whole share of Common Stock by the then number of one four-hundredths halves of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(iiFlip-in Event and (y) Event, and dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by fifty percent (y50%) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's Articles ’s Amended and Restated Certificate of Restatement Incorporation, as the same may be amended from time to time, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"Company), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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 ’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) “Flip-in Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the immediately preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Flip-in Trigger Date, in order that the Company may seek shareholder 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, the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first and/or second sentences sentence or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such 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 notice of such announcements to the Rights Agent). For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Flip-in Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateDate.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("equivalent preferred shares"“Equivalent Common Stock”)) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares Equivalent Common Stock at a price per share of Common Share Stock or equivalent preferred per share of Equivalent Common Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharesEquivalent Common Stock) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock and/or Equivalent Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock 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). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyDirectors, 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. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyDirectors, whose determination shall be described in a statement filed with the Rights AgentAgent 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 subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii), the “Current Market Price” per share of common stock (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 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 (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,
Appears in 1 contract
Sources: Rights Agreement (Lubys Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred Sharesshares of Common Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, 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 any Rights be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Rights. Notwithstanding anything to the contrary in the preceding sentence, in the event that any time after the date of this Agreement and prior to the Distribution Date the Company shall take any action described in clause (A), (B) or (C) of the preceding sentence, then in any such case no adjustment shall be made pursuant to the immediately preceding sentence and (i) the number of shares of Common Stock receivable after such event upon exercise of any Right shall be adjusted by multiplying the number of shares of Common Stock so receivable immediately prior to such event by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event (except that in the case of the declaration of a stock dividend the denominator shall be the number of shares outstanding immediately after payment of such dividend, excluding any shares issued after the record date other than in connection with such dividend), and (ii) each share of Common Stock outstanding immediately after such event shall have associated with respect to it that number of Rights that each share of Common Stock outstanding immediately prior to such event had associated with respect to it. 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) 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 or 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), shall ) hereof) thereafter have the right be entitled to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Sharethereof, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company per right as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of the occurrence of such first occurrence Section 11(a)(ii) Event (such number of shares, the "Adjustment Shares"); provided, however, that if the Purchase Price 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 the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon based on the exercise of each such Right "current market price" per share determined pursuant to Section 11(d) hereof (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for and in lieu of the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which which, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the Common Stock, are determined by the Board of Directors of the Company has deemed to have substantially the same value as shares of Circuit City Stock or CarMax Common Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 as determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 one hundred twenty (120) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need must be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the event that the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares (or shares having the same rightsCommon Stock, privileges and preferences as such Preferred Shares ("equivalent preferred shares") common stock equivalents or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock at a price per share of Common Share Stock or per share of common stock equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock equivalent) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of 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 Rights be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Rights. In case the event that such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the event that the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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 with, and binding on, the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of Rights be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Preferred SharesRights. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such common stock (other than the Rights) or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day period as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or if the shares of common stock are not listed or admitted 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 the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, 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 shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company Corporation shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Common Shares payable in Preferred Common Shares, (B) subdivide any series of the outstanding Preferred Shares, Common Shares or (C) combine any series of the outstanding Preferred Common Shares into a smaller number of Preferred Common Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company Corporation were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e)) hereof) shall, shall thereafter for a period of 6 months after the later of the occurrence of (A) any such event or (B) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Common Shares for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) - 14 - Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Corporation's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of such first occurrence (such number of shares, shares being referred to as the "Adjustment SharesADJUSTMENT SHARES"); providedPROVIDED, HOWEVER, that if the Purchase Price 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 the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrence.Section 11(a)(ii);
(iii) In the event that the aggregate number of there shall not be sufficient treasury shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient unissued (and unreserved) Common Shares to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) and the Rights become so exercisable, notwithstanding any other provision of this Section 11(a)Agreement, or if any to the extent necessary regulatory approval for such issuance has not been obtained and permitted by applicable law, each Right shall thereafter represent the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect right to each such Right, make adequate provision to substitute for the Adjustment Sharesreceive, upon exercise thereof at the then current Purchase Price in accordance with the terms of such Rightsthis Agreement, (1) cash, (2x) a reduction in the Purchase Price, number of (3or fractions of) Common Shares (up to the maximum number of Common Shares which may permissibly be issued) and (y) a number of (or fractions of) other equity securities of the Company Corporation (includingor, without limitationin the discretion of the Board of Directors, shares or units of shares of preferred stock debt) which the Board of Directors of the Company Corporation has deemed determined to have the same aggregate current market value as shares of Circuit City Stock or CarMax Stock(determined pursuant to Sections 11(d)(i) and (ii) hereof, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for applicable) as one Common Share (such issuance, number of (4or fractions of) Common Shares (or other equity securities or debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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 (yCorporation) being referred to herein as the a "Section 11(a)(ii) Trigger DateCAPITAL STOCK EQUIVALENT"), equal in the aggregate to the number of Adjustment Shares; PROVIDED, HOWEVER, if sufficient Common Shares and/or capital stock equivalents are unavailable, then the Company shall be obligatedCorporation shall, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available)permitted by applicable law, except take all such action as may be necessary to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize additional Common Shares could or capital stock equivalents for issuance upon exercise of the Rights, including the calling of a meeting of stockholders; and PROVIDED, FURTHER, that if the Corporation is unable to cause sufficient Common Shares and/or capital stock equivalents to be authorized available for issuance upon exercise in full of the Rights, then each Right shall thereafter represent the right to receive the Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as such Rights or that any necessary regulatory approval for such issuance will be obtainedterms are hereinafter defined). As used herein, the 30-day period set forth above may term "ADJUSTED NUMBER OF SHARES" shall be extended equal to that number of (or fractions of) Common Shares (and/or capital stock equivalents) equal to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization product of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, number of Adjustment Shares and (y) may suspend a fraction, the exercisability numerator of such Rights until which is the expiration number of Common Shares (and/or capital stock equivalents) available for issuance upon exercise of the Substitution Period Rights and the denominator of which is the aggregate number of Adjustment Shares otherwise issuable upon exercise in order full of all Rights (assuming there were a sufficient number of Common Shares available) (such fraction being referred to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect"PRORATION FACTOR"). For purposes of this Section 11(a)(iii), The "ADJUSTED PURCHASE PRICE" shall mean the value product of the Common Shares shall be the Current Market Purchase Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value Proration Factor. The Board of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.Directors
(b) In case the Company Corporation shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Common Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Common Shares (or shares having the same rights, rights and privileges and preferences as such Preferred the Common Shares ("equivalent preferred sharesEQUIVALENT COMMON SHARES")) or securities convertible into such Preferred Common Shares or equivalent preferred common shares at a price per Common Share or equivalent preferred common share (or having a conversion price per share, if a security convertible into such Preferred Common Shares or equivalent preferred common shares (or having a conversion price per share, if a security convertible into Common Shares or equivalent common shares) less than the Current Market Price then current per share market price of such Preferred the Common Shares (as defined in determined pursuant to Section 11(d)) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Common Shares outstanding on such record date plus the number of such Preferred Common Shares which the aggregate offering price of the total number of such Preferred Common Shares or and/or equivalent preferred common shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current per share market price, and the denominator of which shall be the number of such Preferred Common Shares outstanding on such record date plus the number of additional such Preferred Common Shares or and/or equivalent preferred common shares or both 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 Corporation issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyCorporation, 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 RightsAgent. Preferred Common Shares of such series owned by or held for the account of the Company Corporation shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect ineffect if such record date had not been fixed.
(c) In case the Company Corporation shall fix a record date for the making themaking of a distribution to all holders of any series of Preferred the Shares (including any such distribution made in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price then current per share of such Preferred Shares market price (as defined in determined pursuant to Section 11(d)) hereof) of the Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyCorporation, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Common Share and the denominator of which shall be such Current Market Price current per share market price of such Preferred the Common Shares; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation 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 madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "CURRENT PER SHARE MARKET PRICE" of any security (a "SECURITY" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. 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 Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal
Appears in 1 contract
Sources: Rights Agreement (Polymer Research Corp of America)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares shares of Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series or recapitalization of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock stock, other securities and/or property, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) 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 all the Common Shares Stock of the Company shall remain outstanding and shall not be changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, exchanged; (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class equity or series of capital stock voting securities of the Company or any of its Subsidiaries Subsidiaries, or for securities exercisable for or convertible into shares of any class equity or series of capital stock voting securities of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class equity or series of capital stock voting securities of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class such equity or series of capital stock of the Company or any of its Subsidiaries voting securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Stock), ; (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), ; (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's its Subsidiaries (other than in the ordinary course of business and incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (5% of the then total consolidated assets of the Company other than pursuant to a transaction set forth in Section 13(a) hereof), ; (5) shall receive any compensation from from, or otherwise charge for any services to, the Company or any of the Company's its Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past Subsidiaries')past practices, ; or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder stockholder and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) any Person shall Acquiring Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become the Beneficial Owner of Common Shares representing 1530% or more of the total Voting Rights shares of all Common Stock then outstanding, unless the event causing the 30% threshold to be crossed is (I) a transaction set forth in Section 13(a) hereof; (II) an acquisition of shares of Common Shares of the Company then outstanding except Stock pursuant to a cash tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing members of the Board of Directors shall have determined that who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (1) 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 its assets were sold on an orderly basis designed to realize maximum value) and (2) otherwise in the best interests of the Company and its stockholders; or (III) an acquisition of shares of Common Stock pursuant to a cash tender offer is fairor an exchange offer pursuant to which an Acquiring Person becomes, alone or together with its Affiliates and Associates, the Beneficial Owner of 85% or more of the shares of Common Stock then outstanding, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall promptly be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then then-current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share 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 product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series Share of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrenceoccurrence of a Section 11(a)(ii) Event.
(iii) In the event that the aggregate number of there shall not be sufficient authorized but unissued Common Stock and authorized and issued shares of Circuit City Common Stock or CarMax Stock authorized by held in the Company's Articles of Restatement but treasury and not outstanding or reserved for issuance for other purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for that number of the Adjustment SharesShares as to which additional shares of Common Stock have not been authorized for issuance, upon the exercise of such RightsRight, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Common Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value (together with Adjustment Shares available for issuance) equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 sixty (60) 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)(iii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-sixty day period set forth above may be extended to the extent necessary, but not more than 90 one hundred twenty days after the Section 11(a)(ii11(a)(iii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability exercisabilty of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii11(a)(iii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateDate.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five calendar days after such record date) to subscribe for or purchase such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock) at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per shareshare of Common Stock, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after on such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 indebtedness, cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share share of Common Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 such date; provided, however, that in the event that
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, he 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. 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 members of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or Board who are not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities officers of the Company or any of its Subsidiaries which is directly subsidiaries and who are not representatives, nominees, Affiliates or indirectly owned by any Acquiring Person or any Associate or Affiliate Associates of any an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to the Company's shareholders and not inadequate (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 its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders (a "Qualifying Offer"); then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths thousandths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths thousandths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that (x) the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Amended and Restated Certificate of Restatement Incorporation, but which are 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), ) or if any necessary regulatory approval for such issuance has (y) the Company is not been obtained by legally permitted to issue Common Stock upon exercise of the CompanyRights, the Company shall: acting by resolution of the Board shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed being referred to have the same value as shares of Circuit City "Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalentsEquivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 (with prompt notice thereof to the Rights Agent) stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement (with prompt notice thereof to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to defined in Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, 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 Common Stock of the Company issuable upon the exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) 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 all the Common Shares 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 propertyunchanged, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series Common Stock, for shares of capital stock other equity securities of the Company or any of its Subsidiaries Company, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company (Common Stock or any of its Subsidiaries otherwise) or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of, in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (3,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof), (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 stockholder and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B) any Person shall (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Effective Time, become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights shares of all the Common Shares of the Company Stock then outstanding except outstanding, other than pursuant to any transaction set forth in Section 13(a) hereof, or pursuant to a tender offer made in or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the manner prescribed by Section 14(d) Board of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that Directors to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of the Continuing Directors shall have determined that such tender offer is fairCompany and its stockholders, or 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person)Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply, apply (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 or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following five (5) days after the date of the occurrence of an event described in Section 11(a)(ii)(B) hereof and promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof of a Right at one hundred times the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a Preferred Shareshare of Common Stock, such number of full shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying (1) one hundred times the then current Purchase Price by (2) the then number of one fourone-hundredths of a Preferred Share share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.,
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) 23 expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.the
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares the shares of Common Stock ("equivalent preferred sharescommon stock")) or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both common stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both 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 capital stock of the Company issuable upon the exercise of one Right. In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Common 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon 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 issuable upon the 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 madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current mark
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right 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 Except as otherwise provided in this Section 11(a) and in Section 7(e), if the Company shall at any time after the date of this Agreement (A) declare declares a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of subdivides the outstanding Preferred Shares, (C) combine any series of combines the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue issues any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, then the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination combination, or reclassification, as the case may be, and the number and kind of shares of capital stock issuable on such date, shall each will be proportionately adjusted so that the holder of any Right duly exercised after such applicable time shall will be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock whichthat, if such Right had been exercised immediately prior to such date applicable time and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification; provided, however, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 25 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 all the Common Shares of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of if 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with becomes an unaffiliated third party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described and in Section 11(a)(ii)(A), (B) or (C) hereofeach such case, proper provision shall will be made promptly so that that, following the Distribution Date, each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter will have the a right to receive, upon exercise thereof at a price equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall is equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share 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 product, following such first occurrence, shall occurrence will thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, however, that if the Purchase Price 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 will apply and no adjustment will be made pursuant to this Section 11(a)(ii). If any Person shall become an Acquiring Person and the number of Adjustment Shares Rights shall then be further adjusted as provided in this Agreement outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to reflect any events occurring after be afforded by the date of such first occurrenceRights.
(iii) In If the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares that are authorized by the Company's Articles certificate of Restatement incorporation (as amended and in effect as of the relevant time) but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is Rights, are not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any then the Company shall take all such action as may be necessary regulatory approval to authorize additional Common Shares for such issuance has not been obtained by upon exercise of the Company, Rights. If the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each , after good faith effort, be unable to take all such Right (the "Current Value") over (2) the Purchase Price (action as may be necessary to authorize such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment additional Common Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall substitute, for each Common Share that would otherwise be obligated, subject to Section 7(e), to deliver, issuable upon the surrender for exercise of each a Right, a number of Preferred Shares or fraction thereof such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for current per share market price of one Preferred Share multiplied by such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value number or fraction is equal to the Spread. If the Board current per share market price of Directors one Common Share as of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for date of issuance upon exercise in full of such Rights Preferred Shares or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 fraction thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case If the Company shall fix fixes a record date for the issuance of rights, options options, or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same or more favorable rights, privileges privileges, and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price then current per share market price of such the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall will be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall will be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both Preferred 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 will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which may will be in a form other than cash, the value of such consideration shall will be as determined in good faith by the Board of Directors of the Company, whose determination shall will be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Preferred Shares of such series owned by or held for the account of the Company shall will not be deemed outstanding for the purpose of any such computation. Such adjustment shall will 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 Purchase Price shall will be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix fixes a record date for the making of a distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of cash, evidences of indebtedness indebtedness, or other assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall will be the Current Market Price then current per share market price of such the Preferred Shares (as defined in Section 11(d)) 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 will be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness indebtedness, or other assets so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall will be such Current Market Price current per share market price of such the Preferred Shares; provided, however, that in no event will 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 will be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price will again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the "current per share market price" of any Security (a "Security" for the purpose of this Section 11(d)(i)) on any date will be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination, or reclassification of such Security 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, combination, or reclassification, then, and in each such case, the current per share market price will be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day will 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 National Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"), or if the Security is not listed or admitted to trading on Nasdaq as reported in the principal consolidated transaction reporting system with respect to securities listed on the American Stock Exchange or other principal national securities exchange on which the Security is listed or admitted to trading, or if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq Automated Quotations System or such other system then in use, or if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term "Trading Day" means a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase 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 (A) declare a dividend on any series of the Company Preferred Shares Stock payable in shares of Company Preferred SharesStock, (B) subdivide any series of the outstanding Company Preferred SharesStock, (C) combine any series of the outstanding Company Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Company Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Company Preferred Stock or capital stock 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 entitled to receive, upon payment (if applicable) of the Purchase Price then in effect, the aggregate number and kind of shares of Company Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In Subject to Section 24 of this Agreement, in the eventevent that:
(A) any Person shall become an Acquiring Person, other than pursuant to any transaction set forth in Section 13(a) hereof;
(B) 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 all the Company Common Shares of the Company Stock 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 propertyunchanged, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock Company Common Stock, for other equity securities of the Company or any of its Subsidiaries such Subsidiary, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company or any of its Subsidiaries (whether Company Common Stock or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than one percent (1% %) the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person;
(D) during such time as there is an Acquiring Person, the Company shall issue new shares of capital stock to an Acquiring Person having voting power in the election of directors of the Company (other than Company Preferred Stock); or
(E) during such time as there is an Acquiring Person, the Company shall take material steps to liquidate or dissolve; then, promptly following immediately upon the date of the occurrence of any an event described in Section 11(a)(ii)(A11(a)(ii)(A)-(E) hereof (a “Section 11(a)(ii) Event”), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon full or partial exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths hundredth (1/100) of a share of Preferred ShareStock, up to such number of shares of Circuit City Company Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Units 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 (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) fifty percent (50% %) of the Current Market Price per share of the applicable series of Company Common Shares Stock (determined pursuant to Section 11(d)) hereof) on the date earlier of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after a) the date on which any Person becomes an Acquiring Person and (b) the date on which a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity) is first occurrencepublished or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any successor rule, if upon consummation thereof such Person would be the Beneficial Owner of twenty percent (20%) or more of the shares of Company Common Stock then outstanding.
(iii) In the event that the aggregate number of shares of Circuit City Company Common Stock or CarMax Stock which are authorized by the Company's Articles ’s Certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph Paragraph (ii) of this Section 11(a), or if in any necessary regulatory approval for such issuance has not been obtained by exchange of the Rights pursuant to Section 24 hereof, the Company, by the Company vote of the Board of Directors shall: (A) determine the excess of (1) the value of the Adjustment Shares shares issuable upon the exercise of each such a Right (the "“Current Value"”) over (2) the Purchase Price (such excess, excess being the "“Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Sharesshares of Company Common Stock so issuable, upon exercise payment of such Rightsthe Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such other shares or units of shares of preferred stock are herein called "common stock equivalents"being “Common Stock Equivalents”)), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (43) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (54) other assets, or (65) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the Company, after receiving advice of a nationally recognized from an investment banking firm selected by the Board of Directors of the Companyfirm; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty 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) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such Right and without requiring payment a Right, shares of the Purchase Price, Company Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash shall have an aggregate value equal to the Spread. If Any substitution pursuant to Subsection (ii) of this Section 11(a) or pursuant to Section 24(c) shall be effected by the Company, by the vote of the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provideDirectors, subject to Section 7(e11(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, in its sole and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effectabsolute discretion. For purposes of this Section 11(a)(iii11(a)(ii), the value of the a share of Company Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Company Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" equivalent shall be deemed to have the same value as the Company Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Company Preferred Shares Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five calendar days after such record date) to subscribe for or purchase such shares of Company Preferred Shares Stock (or shares having substantially the same rights, privileges and preferences as such shares of Company Preferred Shares Stock ("equivalent preferred shares"“Preferred Stock Equivalents”)) or securities convertible into such Company Preferred Shares Stock or equivalent preferred shares Preferred Stock Equivalents at a price per Common Share share of Company Preferred Stock or equivalent preferred per share of Preferred Stock Equivalents (or having a conversion price per share, if a security convertible into such Company Preferred Shares Stock or equivalent preferred sharesPreferred Stock Equivalents) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Company Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the sum of the number of such shares of Company Preferred Shares Stock outstanding on such record date plus the number of such shares of Company Preferred Shares Stock which the aggregate offering price of the total number of such shares of Company Preferred Shares or equivalent preferred shares or both Stock and/or Preferred Stock Equivalents so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such shares of Company Preferred Shares Stock outstanding on such record date plus the number of additional such shares of Company Preferred Shares or equivalent preferred shares or both Stock and/or Preferred Stock Equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series Company Preferred 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series shares of Company Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such shares of Company Preferred SharesStock, but including any dividend payable in stock other than Company Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Company Preferred Shares (as defined in Section 11(d)) Stock on such record date, 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) Agent and shall be binding on the Rights Agent and the holder of the portion Rights) of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such distributable in respect of a share of Company Preferred Share Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Company Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the “Current Market Price” per share of Company Common Stock or Company Preferred Stock on any date shall be deemed to be the average of the daily closing prices per share of such shares for the ten (10) consecutive Trading Days (as defined in this Section 11(d) below) immediately prior to such date; provided, however, if prior to the expiration of such requisite ten Trading Day period the issuer announces either (A) a dividend or distribution on such shares payable in such shares or securities convertible into such shares (other than the Rights), or (B) any subdivision, combination or reclassification of such shares, then, following the ex-dividend date for such dividend or the record date for such subdivision, as the case may be, the Current Market Price shall be properly adjusted to take into account such event. The closing price for each day shall be, if the shares are listed and admitted to trading on a national securities exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such shares are listed or admitted to trading or, if such 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 such 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 such shares selected by the Board of Directors of the Company. If on any such date no market maker is making a market in such 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. If such 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 Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean, if such shares are listed or admitted to trading on any national securities exchange, a day on which the principal national securities exchange on which such shares are listed or admitted to trading is open for the transaction of business or, if such shares are not so listed or admitted, a Business Day.
Appears in 1 contract
Sources: Stockholder Rights Agreement (Nurx Pharmaceuticals, Inc.)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof11 (a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect(and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act event any Person, alone or together with its Affiliates and the rules and regulations promulgated thereunder; providedAssociates, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)below, shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right would otherwise be then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was would otherwise be then exercisable immediately prior to the first occurrence of a Section 11(a)(iiand (y) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company’s Common Shares (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of such first occurrence (such number of shares, 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); and provided further that the Purchase Price and the number of Adjustment Shares adjustment set forth in this Section 11(a)(ii) shall be effective only at and after the time at which the authority of the Board of Directors of the Company to redeem the Rights pursuant to Section 23(b), as such Section may be amended pursuant to Section 27, shall have terminated. Notwithstanding the foregoing, in the event any Person shall become an Acquiring Person, any Rights that are or, after becoming an Acquiring Person, were beneficially owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person), shall become null and void at the time of such event without any further adjusted as provided in action, and no holder of such Rights shall thereafter have any right to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to reflect Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any events occurring after Associate or Affiliate of any Acquiring Person whose Rights would be void pursuant to the date preceding sentence; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such first occurrenceAcquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate thereof whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if the Company’s Board of Directors determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's ’s Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of each such a Right (the "“Current Value"”) over (2) the Purchase Price (such excess, the "“Spread"), ”) and (B) with respect to each such Right, make adequate provision to substitute in whole or in part for the Adjustment such Common Shares, upon exercise of such the Rights, (including, without limitation, full payment of the Purchase Price) (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of any series of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called "“common stock share equivalents"”)), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event Distribution Date and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a23(b) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) “Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such the Rights 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 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "“Substitution Period"”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to the second paragraph of Section 7(e11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "“common stock equivalent" ” shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("“equivalent preferred shares"”)) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d)) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current per share market price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving corporation or in a statutory share exchange) of evidences of indebtedness or cash or non-cash assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price then current per share market price of such the Preferred Shares (as defined in determined pursuant to Section 11(d)) hereof) 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) of the portion of the cash, assets or evidences of indebtedness or cash or non-cash assets so to be distributed on, or of such subscription rights or warrants applicable to to, one such Preferred Share and the denominator of which shall be such Current Market Price current per share market price of such the Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is record date had not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such not been fixed.
(i) For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such Security (other than the Rights), or (B) any subdivision, combination or reclassification of such Security, 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, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. 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 Security is 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 the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the fair value of such shares on
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock (or other capital stock stock, as the case may be) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification. 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) In the event
event (Aa "Section 11(a)(ii) Event") that any Acquiring Person (other than an Exempt Person), alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date Rights Dividend Declaration Date, become the Beneficial Owner of this Agreement, directly 15% or indirectly, (1) shall merge into more of the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation shares of such merger or combination and all the Common Shares Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or then outstanding, unless the Company or cash or any other property, (2) shall, in one or more transactions, transfer any assets event causing the 15% threshold to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares Stock of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) or an exchange offer for all outstanding shares of Common Stock of the Exchange Act Company at a price and on terms determined by at least a majority of the rules and regulations promulgated thereunder; providedOutside Directors, howeverafter receiving advice from one or more investment banking firms, that to be (a) at a price that is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority of otherwise in the Continuing Directors shall have determined that such tender offer is fair, 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 best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following after the date of the occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourten-hundredths thousandths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourten-hundredths thousandths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then exercisable), and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock of the Company on the date of such first occurrence (such number of shares, shares being referred to as the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(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 resolution of the Board may, and in the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock of the Company which are authorized by the Company's Articles certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, acting by resolution of the Company Board, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price attributable to each Right (such excess, excess being referred to as the "Spread"), ) and (B) with respect to all or a portion of each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company other than Common Stock of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable of the Company (such shares or units of shares of preferred stock are herein called being referred to as "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoingforegoing which, having when added to any shares of Common Stock of the Company 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 nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock of the Company (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock of the Company could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such 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 purposes of this Section 11(a)(iii), the value of the Common Shares Stock of the Company shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock of the Company on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalentCommon Stock Equivalent" shall be deemed to have the same value as the Common Shares Stock of the Company on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares Stock (or shares having the same rights, privileges and preferences as such the shares of Preferred Shares Stock ("equivalent preferred sharesEquivalent Preferred Stock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Equivalent Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering subscription or purchase price of the total number of such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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 Rightsconclusive for all purposes. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 indebtedness, cash (other than a regular, periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred SharesStock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, 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 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights) or (B) any subdivision, combination, consolidation, reverse stock split or reclassification of such Common Stock, and prior to the expiration of the requisite 30-Trading Day or 10-Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, consolidation, reverse stock split or reclassification, then, and in each such case, the "Current Market Price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system or by the Nasdaq National Market with respect to securities listed or admitted to trading on another national securities exchange or quoted by the Nasdaq National Market, respectively, or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or quoted by the Nasdaq National Market, 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 Nasdaq Stock Market or such other quotation system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date the Common Stock is not publicly held or so listed, admitted to trading or quoted, and no market maker is making a market in the Common Stock, "Current Market Price" shall mean the fair value of such shares on such date 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. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of on the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both 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).. -12-
(ii) In the event
(A) any 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 all the Common Shares 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, other than in connection with the exercise of Rights or in connection with the exercise or conversion of securities exchangeable or convertible into capital stock of the Company or any of its subsidiaries, transfer any assets to the Company or any of its Subsidiaries subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries subsidiaries or otherwise obtain from the Company or any of its Subsidiariessubsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiariessubsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with from or ofwith, as the case may be, the Company or any of its Subsidiariessubsidiaries, assets (assets, including securities) , 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof)party, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (5) shall receive any compensation from the Company or any of the Company's Subsidiaries subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiariessubsidiaries') past practices, or (65) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement of law or governmental regulationshareholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiariessubsidiaries, or or
(B) any Person shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during 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 -13- merger or consolidation of the Company with any of its Subsidiaries subsidiaries or any other transaction or series of transactions involving the Company or any subsidiaries of its Subsidiaries the Company (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% of the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into equity securities of the Company or any of its Subsidiaries subsidiaries which is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or or
(C) Any Acquiring Person, alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreement, become the Beneficial Owner of 30% or more of the Common Stock then outstanding, unless the event causing the 30% threshold to be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of Common Stock pursuant to a tender offer or exchange offer made pursuant to Schedule 14D-1 (or any successor form) filed with the Securities and Exchange Commission for all outstanding shares of Common Stock (other than shares of Common Stock held by the Person making the offer, or any Affiliate or Associate of such Person) at a price and on terms determined in good faith by at least a majority of the Disinterested Directors who are not officers of the Company to be (a) at a price which is fair to shareholders (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 its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders, then, and in each such case, proper provision shall be made so that each holder of a Right, Rights Certificate (except as provided below and in Section 7(e) hereof), shall thereafter have the a right to receive, upon exercise thereof at the then then- current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number shares of one four-hundredths of a Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one fourone-hundredths of a share of Preferred Share Stock for which a Right was Rights Certificate is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price current per share market price of the applicable series of Common Shares Stock (determined pursuant to Section 11(d)) on the fifth day (or if such day is not a business day, the first business day after the fifth day) after the earlier of the date of such the occurrence or the date of the first occurrence public announcement of any one of the events listed above in this subparagraph (ii) (such number of shares, shares being referred to as the -14- "Adjustment Shares"); , provided, however, that if the Purchase Price adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and the number of Adjustment Shares no adjustment shall be further adjusted as provided made pursuant to this Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence of any of the events listed above in this Agreement to reflect paragraph (ii), any events occurring Rights that are or were on or after the date earlier of the Distribution Date or Stock Acquisition Date beneficially owned by the Acquiring Person or any Associate or Affiliate of the Acquiring Person shall become void and any holder of such first occurrenceRights shall thereafter have no right to exercise such Rights under any provision of this Agreement. The Company shall not enter into any transaction of the kind listed in this subparagraph (ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements in effect which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. Any Rights Certificate issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Rights Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and any Rights Certificate issued pursuant to Section 6 or this Section 11 upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the legend set forth in Section 4(b) hereof.
(iii) In lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, the Company may, if two-thirds of the Disinterested Directors determine that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Restated Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") ), over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, foregoing having an aggregate value equal to the -15- Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm expert selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a an event described in Section 11(a)(ii) Event and (y) hereof or the first date on which that the Company's right of redemption to redeem the Rights pursuant to Section 23(a) expires (the later of (x) and (y) being referred 23 hereof, as such date may be amended pursuant to herein as the "Section 11(a)(ii) Trigger Date")26 hereof, shall expire, then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for of exercise of each such Right a Rights Certificate and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares securities and/or cash have an assets that in the aggregate value are 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 Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after following the first occurrence of an event described in Section 11(a)(ii) Trigger Datehereof, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, period as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current per share market price of Common Stock (as determined pursuant to Section 11(d) hereof) per share on the later of the Common Shares on date of the first occurrence of an event described in Section 11(a)(ii) Trigger Date hereof and the first date that the right to redeem the Rights pursuant to Section 23 hereof, as such date may be amended pursuant to Section 26 hereof, shall expire and the value of any "common stock equivalentequivalents" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the event the Company shall fix a record date for the issuance of rights, options rights or warrants to all holders of any series of Preferred Shares Stock entitling them (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe -16- for or purchase such shares of Preferred Shares Stock (or shares having the same rights, privileges and preferences as such shares of Preferred Shares Stock ("equivalent preferred sharesstock") )), or securities convertible into such Preferred Shares Stock or equivalent preferred shares stock at a price per Common Share share of Preferred Stock or equivalent preferred share stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred shares) stock), less than the Current Market Price current per share market price of such the Preferred Shares Stock (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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 RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the event the Company shall fix a record date for the making of a distribution to all holders of any series of the Preferred Shares 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 or assets (other than a regular quarterly periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or a dividend payable in such Preferred SharesStock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madth
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he or she would have owned owned, upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any shall become an Acquiring Person, at any time after unless 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 event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer hereof or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any is an acquisition of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority of otherwise in the Continuing Directors shall have determined that such tender offer is fair, 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 best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths of a Preferred Shareshare of Common Stock for which a Right was theretofore exercisable, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of sharesShares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Certificate of Restatement Incorporation, as amended (the "Certificate of 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares shares, or units of shares, of preferred stock of the Company, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed being referred to have the same value as shares of Circuit City "Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalentsEquivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as current market price per share of the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares or fractional units of shares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) ), and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number of shares (or fractions thereof) of Common Stock and the number and kind of shares of capital stock issuable on such datedate upon exercise of a Right, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of capital stock and other securities which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, 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 exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 24 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter shall, for a period of 60 days (or such other longer period as may be established by action of a majority of the Board of Directors) after the later of the occurrence of any such event and the effective date of an appropriate registration statement pursuant to Section 9, have the a right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares (or fractions thereof) of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price for a full share of Common Stock by the then number of one four-hundredths tenths of a Preferred Share share of Common Stock for which a Right was is exercisable immediately 18 prior to the first occurrence of a Section 11(a)(ii) Event, such event and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price current market price per one full share of the applicable series of Common Shares Stock (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, one tenths of a share being referred to as the "number of Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by then, in the Companyevent the Rights become so exercisable, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rightsthe Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which a majority of the Board of Directors of the Company has have deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called stock, "common stock equivalentsCommon Stock Equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 a majority of the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Stock Acquisition Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 one hundred and fifty days (150) days after the Section 11(a)(ii) Trigger Stock Acquisition Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iiisubparagraph (iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 and shall give concurrent written notice to the Rights Agent stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement and notice to the Rights Agent at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iiisubparagraph (iii), the value of the Common Shares Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Stock Acquisition Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have be the same value as the value of Common Shares Stock on such date. The Company shall give the Rights Agent notice of the selection of any Common Stock Equivalent under this subparagraph (iii). In the event any applicable law, regulation, requirement of any federal or state agency, commission or authority, or agreements or instruments in effect on the Stock Acquisition Date (a "Restriction") prohibits all or part of the payments or distributions required hereunder, payments or distributions shall be made pro rata to holders of Rights to the extent permitted and the Company shall advise the Rights Agent of any unpaid amounts. If any or all such Restrictions shall thereafter lapse, additional payments or distributions shall be made to the extent permitted pro rata to all holders of Rights until all unpaid amounts have been paid in full. If payment has been postponed in full or in part as aforesaid, the Company shall notify all holders of Rights of such postponement and of the maximum amount that may be paid or distributed consistent with any Restriction. Such notice shall describe all such Restrictions, specify the amount, if any, that may be paid or distributed and the amount of the payment of which must be postponed, and describe the efforts being undertaken by the Company to eliminate all such Restrictions. At such time as the Company may make additional payments or distributions, the Company shall so notify all holders of Rights, which notice shall indicate the maximum additional amount that the Company may then pay or distribute. The Company shall use its best efforts to eliminate expeditiously any and all Restrictions so as to permit the full payment or distribution of amounts acquired hereunder. During such time as amounts are unpaid the Company shall not make any distributions on, or repurchases of, or any shares of Common Stock.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Common Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares Common Stock (or shares having substantially the same rights, rights and privileges and preferences as such Preferred Shares shares of Common Stock ("equivalent preferred sharescommon stock") or securities convertible into such Preferred Shares Common Stock or equivalent preferred shares common stock) at a price per share of Common Share Stock or per share of equivalent preferred share common stock (or having a conversion price per share, if a security convertible into such Preferred Shares Common Stock or equivalent preferred sharescommon stock) less than the Current Market Price per share of such Preferred Shares current market price (as defined in Section 11(d)) per share of Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both so common stock to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or shares of Common Stock and/or equivalent preferred shares or both 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 exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in reasonably and with good faith to the holders of Rights 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 on the Rights Agent and the holders of the RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Common Stock, but including any dividend payable in stock other than Preferred SharesStock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in Section 11(d)) per share of Common Stock on such record date, less the fair market value (as determined in reasonably and with good faith to the holders of Rights 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 on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to distributable in respect of one such Preferred Share share of Common Stock and the denominator of which shall be such Current Market Price current market price per share of such Preferred Sharesthe Common Stock; provided, however, that in no event shall the consideration to be paid upon exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price which would be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than in 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 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock or (B) any subdivision, combination or reclassification of such Common Stock, 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, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section Section 11.
(i) In the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section Section 11(a) and Section Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, 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 all the Common Shares first public announcement 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock declaration of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of Rights dividend, become an Acquiring Person, unless the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution event causing such Person to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the later of the occurrence of any such event described in Section 11(a)(ii)(A), (B) or (C) hereofand the Record Date, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, Agreement such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section Section 11(a)(ii) Event, and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each such Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); providedprovided that, that for the avoidance of doubt, the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence. The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person or any of its Affiliates, Associates, or the nominee of any of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing, unless and until it shall have received such notice.
(iii) In the event that the aggregate number of treasury shares plus the number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's ’s Amended and Restated Articles of Restatement Incorporation, as amended, but not outstanding outstanding, subscribed for, or reserved or otherwise committed for issuance for purposes other than upon exercise of the Rights Rights, is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (iiclause (ii) of this Section Section 11(a), ) or if any necessary regulatory approval for such issuance has not been obtained by the CompanyBoard shall so elect, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which that the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"securities being referred to as “Common Stock Equivalents”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval stockholder approval, if necessary, for the authorization and/or of such additional shares or take action to obtain such regulatory approval (such 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 and/or second third sentences of this Section Section 11(a)(iii), the Company (x1) shall provide, subject to Section Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 11(a)(iii) and give the Rights Agent a copy of such announcement. For purposes of this Section Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as Current Market Price per share of the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") Common Stock or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares which shares of Common Stock that the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both of Common Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price Price, and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Shares of such series 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 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 Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares Common Stock (including without limitation any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets ), cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(d) The Current Market Price per share of Common Stock on any date shall be deemed to be (1) for the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days immediately prior to, but
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series or recapitalization of the Preferred Shares Common Stock (including any such reclassification or recapitalization in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or combination, reclassification, or recapitalization and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification, or reclassificationrecapitalization. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, the holder of any Right which has not theretofore been exercised shall thereafter have the right be entitled to receive, upon exercise thereof of such Right at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall Company equal to the result obtained by (x1) multiplying the then current Purchase Price by the then one (or by such other number of one four-hundredths shares of Common Stock then acquirable upon the exercise of a Preferred Share for which a Right was exercisable immediately prior Right, giving effect to the first occurrence of a Section 11(a)(iiany adjustment in such number as provided herein) Event, and (2) dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) on hereof) per share of Common Stock as of the date of such first occurrence (such number of shares, the "Adjustment Shares")Stock Acquisition Date in question; provided, however, that if the Purchase Price transaction that would otherwise give rise to the foregoing adjustment also constitutes an event described in Section 13(a), then only the provisions of Section 13 shall apply and the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In the event that the aggregate number lieu of issuing shares of Circuit City Common Stock or CarMax Stock authorized by in accordance with Section 11(a)(ii) hereof, the Company's Articles ’s Board of Restatement but Directors may, if the Board of Directors determines in its discretion that such action is necessary or appropriate and not outstanding contrary to the interests of holders of Rights, elect to issue or reserved for issuance for purposes other than pay, upon the exercise of the Rights is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as cash (including an offset against the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(aPurchase Price), property, shares of Common Stock, preferred stock, or if other securities or any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) combination thereof having an aggregate value equal to the value of the Adjustment Shares shares of Common Stock which otherwise would have been issuable upon pursuant to Section 11(a)(ii), which value shall be determined by a reputable investment banking firm selected by the exercise Company’s Board of each such Right (Directors. For purposes of the "Current Value") over (2) the Purchase Price (such excesspreceding sentence, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise value of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of any preferred stock which the Board of Directors of the Company has determines to be a “common stock equivalent” shall be deemed to have the same value as shares the Common Stock. Any such election by the Board of Circuit City Directors must be made and publicly announced within 90 days of the relevant Stock or CarMax Stock, as applicable (such shares or units Acquisition Date. Following the occurrence of shares of preferred stock are herein called "common stock equivalents"an event described in Section 11(a)(ii), except the Board of Directors may (as determined in its discretion by the vote of a majority of the Directors then in office) suspend the exercisability of the Rights for a period of up to 90 days following the occurrence of such event to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal determined whether to the Spread. If the Board exercise its rights of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval election under this paragraph (such period, as it may be extended, the "Substitution Period"a)(iii). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case If the Company shall fix fixes a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock) at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per shareshare of Common Stock, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares shares of Common Stock so offered for subscription or equivalent preferred shares or both so to be offered purchase (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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 RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (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) , of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the “current market price” of any share of Common Stock or any other stock or any Right or other security shall be deemed to be the average of the daily closing prices of such 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 current market price of the security is determined during a period following the announcement by the issuer of such security of (A) a dividend or distribution on such security payable in shares of Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination, reclassification, or recapitalization of such security, 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, reclassification, or recapitalization then, and in each such case, the “current market price” shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the 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 the shares of Common Stock are listed or admitted to trading or, if the securities are not listed or admitted to trading on any national securities exchange, the last quoted sale 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 the securities 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 securities selected by the Board of Directors. If on any such date no market maker is making a market in the securities, the fair value of such securities on such date, as determined in good faith by the Board of Directors, shall be used; provided that, if at the time of such determination there is an Acquiring Person, the current market price of such security on such date shall be determined by a reputable 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 the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, “current market price” per share shall mean the fair value per share as determined in good faith by the Board of Directors provided that, if at the time of such determination there is an Acquiring Person, the current market price of such security on such date shall be determined by a reputable 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, 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 Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (Asecurities) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) 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 all the Common Shares Stock of the Company shall remain outstanding and not changed into or exchanged for stock or unchanged, or
(B) any Person (other securities than the Company, any Subsidiary of the Company, any other Person or employee benefit plan of the Company or cash of any Subsidiary of the Company, or any other propertyPerson organized, (2) shall, in one appointed or more transactions, transfer any assets to established by the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock Subsidiary of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares pursuant to the terms of any class or series of capital stock of such plan) shall, at any time after the Company or any of its Subsidiaries or otherwise obtain from Rights Dividend Declaration Date, become an Acquiring Person and a Stock Acquisition Date with respect to such Person shall have occurred, unless the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution event causing such Person to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority of otherwise in the Continuing Directors shall have determined that such tender offer is fair, 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 best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, subject to Section 24 hereof, promptly following five (5) days after the occurrence of an event described in Section 11(a)(ii)(B) hereof and promptly following the occurrence of any an event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision 21 - 18 - shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourtwo-hundredths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourtwo-hundredths of a share of Preferred Share 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph pire▇ (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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 ▇▇e later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants pursuant to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record dateSection 11(d) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares"hereof) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on an such record date date, plus the number of additional such shares of Preferred Shares or equivalent preferred shares or both Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
Appears in 1 contract
Sources: Rights Agreement (Bestfoods)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 any series of the Preferred Shares Stock payable in shares of Preferred SharesStock, (B) subdivide any series of or split the outstanding Preferred SharesStock, (C) combine any series of or consolidate the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books for the Preferred Stock (or other capital stock, as the case may be) of the Company were open, he 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. 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) In the event
(A) event any Acquiring Person or any Associate or Affiliate of any Acquiring Personshall, at any time after the date of this AgreementRights Dividend Declaration Date, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner shares of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender or an exchange offer shall provide for the acquisition of all of the outstanding shares of Circuit City Common Stock at a price and CarMax Stock held on terms determined by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 members of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or Board who are not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities officers of the Company or any of its Subsidiaries which is directly subsidiaries and who are not representatives, nominees, Affiliates or indirectly owned by any Acquiring Person or any Associate or Affiliate Associates of any an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to the Company's shareholders and not inadequate (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 its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders (a "Qualifying Offer"); then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one fourone-hundredths thousandths of a share of Preferred ShareStock, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths thousandths of a share of Preferred Share Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles Amended and Restated Certificate of Restatement Incorporation, but which are 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: acting by resolution of the Board shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed being referred to have the same value as shares of Circuit City "Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalentsEquivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares each Adjustment Share shall be the Current Market Price (as determined pursuant to defined in Section 11(d) hereof) per share of the Common Shares Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than equal the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) the Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right 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 any series of the Preferred Series A Shares payable in Preferred Series A Shares, (B) subdivide any series of the outstanding Preferred Series A Shares, (C) combine any series of the outstanding Preferred Series A Shares into a smaller number of Preferred Series A Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Series A Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of capital stock whichthat, if such Right had been exercised immediately prior to such date and at a time when the Preferred Series A Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) 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 all the Common Shares 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 propertyunchanged, (2) shall, in one or more transactions, transfer any assets to the Company or to any of its Subsidiaries (including, in the case of Subsidiaries, by way of a merger or consolidation of any such Subsidiary) in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCompany), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of assets (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries (including, in the case of Subsidiaries, assets (including securities) by way of a merger or consolidation of any Subsidiary), 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (5) shall receive any compensation from the Company or any of the Company's its Subsidiaries other than compensation for full-full time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, practices or (65) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement of law or governmental regulation), of any loans, assumptions of loans, advances, guarantees, pledges or other financial assistance assistance, or any tax credits or other tax advantage advantage, provided by the Company or any of its Subsidiaries, or ;
(B) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall become the Beneficial Owner of Common Shares representing 15% twenty percent (20%) or more of the total Voting Rights of all the Common Shares of the Company then outstanding except outstanding, other than pursuant to a tender offer made any transaction set forth in the manner prescribed by Section 14(d13(a) of the Exchange Act and the rules and regulations promulgated thereunderhereof; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a transaction to which Section 13(a) applies (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which that has the effect, directly or indirectly, of increasing by more than one percent (1% %) the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into equity securities of the Company or any of its Subsidiaries which Subsidiaries, that is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, ; then, promptly following the occurrence of any event described and in Section 11(a)(ii)(A), (B) or (C) hereofeach such case, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number Series A Shares, and subject to the provisions of one four-hundredths of a Preferred ShareSection 11(a)(iii) below, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Series A Share for which a Right was exercisable immediately prior to the first occurrence of a an event set forth in Section 11(a)(ii11(a)(ii)(A), (B) Eventor (C) above, and (y) dividing that product (which productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by fifty percent (y50%) 50% of the Current Market Price current per share market price of the applicable series of Common Shares (determined pursuant to Section 11(d) hereof)) , but not less than the par value thereof, on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number total of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement Common Shares that are issued but not outstanding or and authorized but unissued (excluding Common Shares reserved for issuance for purposes pursuant to the specific terms of any indenture, option plan or other than upon exercise of the Rights agreement) is not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (iiSection 11(a)(ii) of this Section 11(a)hereof, or if and subject to such limitations as are necessary to prevent a default under any necessary regulatory approval agreement for such issuance has not been obtained by the Company, money borrowed to which the Company is a party and to comply with applicable law, then the Board shall: (A) determine the excess of (1) the value value, based upon the current per share market price of the Common Shares (determined pursuant to Section 11(d) hereof), of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), ) and (B) with respect to each such Right, make adequate provision to substitute for for, or provide an election to acquire in lieu of, the Adjustment Shares, upon exercise payment of the applicable Purchase Price (which term shall include any reduced Purchase Price) any combination of the following having an aggregate value equal to the Current Value (such Rights, aggregate value to be determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board): (1) cash, (2) a reduction in the Purchase Price, (32) Common Shares or and/or other equity securities of the Company (including, without limitation, shares or units of shares of any series of preferred stock which that the Board of Directors Board, upon approval by a majority of the Company Independent Directors, has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares share of preferred stock are herein called hereinafter referred to as "common stock Common Share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and/or (43) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) and/or cash and other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date")Triggering Event, then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares securities and/or cash have an in the aggregate value are equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after following the Section 11(a)(ii) Trigger Datefirst occurrence of a Triggering Event, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need needs to be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the date of the first occurrence of a Triggering Event. The provisions of this Section 11(a)(ii11(a)(iii) Trigger Date shall apply only to Common Shares of the Company and shall not apply to the value securities of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such dateother Person.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Series A Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Series A Shares (or shares having the same rights, privileges and preferences as such Preferred the Series A Shares ("equivalent preferred shares")) or securities convertible into such Preferred Series A Shares or equivalent preferred shares at a price per Common Series A Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Series A Shares or equivalent preferred shares) less than the Current Market Price current per share market price of such Preferred the Series A Shares (as defined in Section 11(d)) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Series A Shares outstanding on such record date plus the number of such Preferred Series A Shares which that the aggregate offering price of the total number of such Preferred Series A Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Series A Shares outstanding on such record date plus the number of additional such Preferred Series A Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the CompanyBoard, 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. Preferred Series A Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred the Series A Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness any debt securities, cash or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Series A Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current per share market price of such Preferred the Series A Shares (as defined in Section 11(d)) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights AgentAgent and binding on the holders of Rights) of the portion of the cash, assets or evidences of indebtedness debt securities so to be distributed or of such subscription rights or warrants applicable to one such Preferred Series A Share and the denominator of which shall be such Current Market Price current per share market price of such Preferred Sharesthe Series A Shares (as determined pursuant to Section 11(d) hereof). Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, the "current per share market price" of the Common Shares on any date shall be deemed to be the lesser of (x) the average of the daily closing prices per Common Share for the 30 consecutive Trading Days immediately prior to such date or (y) the average of the daily closing prices per Common Share for the 30 consecutive Trading Days immediately following such date; provided, however, that in the event that the current per share market price of the Common Shares is determined during a period following the announcement by the issuer of such Common Shares of a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights), or any subdivision, combination or reclassification of such Common Shares, and prior to the expiration of 20 Trading Days after the ex-dividend date for such dividend or distribution, then, and in each such case, the current market price shall be appropriately adjusted to reflect the current market price per Common Share equivalent. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange, if any, on which the Common Shares are then listed or admitted to trading or, if the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by The NASDAQ Stock Market ("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 pri
Appears in 1 contract
Sources: Rights Agreement (Orthologic Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares and other 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 (A) declare a dividend on any series security of the Preferred Shares Company payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Shares or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Shares or capital stock whichstock, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Share transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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) In the event:
(A1) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this AgreementStock Acquisition Date, 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 all the Common Shares of the Company or other equity securities 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 propertyoutstanding, (2) shall, in one transaction or more a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of any class or series of capital stock other equity securities of the Company or any of its Subsidiaries Company, or for securities exercisable for or convertible into shares of any class or series of capital stock equity securities of the Company (Common Shares or any of its Subsidiaries otherwise) or otherwise obtain from the Company or any of its SubsidiariesCompany, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries such equity securities (other than as part of pursuant to a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesCommon Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of its Subsidiaries, assets (including securities) 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 party (party, other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (of assets having an aggregate fair market value of more than $5,000,000 in one transaction or more a series of transactions), to, from, from or with or of, (as the case may be, ) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (), other than pursuant to a transaction set forth in Section 13(a) hereof)13 Event, (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 or
(B2) any Person shall (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date become the Beneficial Owner of Common Shares representing 1520% or more of the total Voting Rights of all the Common Shares then outstanding, unless the event causing the 20% threshold to be crossed is a Section 13 Event, or is an acquisition of the Company then outstanding except Common Shares pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding Common Shares at a price and on terms that provide fair value to all shareholders, as determined by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) at least a majority of the Continuing Board of Directors shall have determined of the Company, after taking into consideration all factors that such tender offer is fairmembers of the Board of Directors deem relevant, including, without limitation, the long-term prospects and value of the Company and the prices and terms that such members of the Board of Directors believe, in good faith, could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value, or
(C3) 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 involving the Company or any of its Subsidiaries Subsidiaries, other than a Section 13 Event or series of such Events (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which that has the effect, directly or indirectly, of increasing by more than 1% the its proportionate share of share, the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into securities of the Company or any of its the Company's Subsidiaries which that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the first occurrence of any event described in a Section 11(a)(ii)(A), (B11(a)(ii) or (C) hereofEvent, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareShare Fractions, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Fractions 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 productwhich, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares that are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares of the same or a different class or other equity securities of the Company (including, without limitation, preferred shares or units of preferred shares that a majority of preferred stock which the Board of Directors of the Company in office at the time has deemed (based, among other things, on the dividend and liquidation rights of such preferred shares) to have substantially the same economic value as shares of Circuit City Stock or CarMax Stock, as applicable Common Shares (such shares or units of shares of preferred stock are herein called shares, hereinafter referred to as "common stock share equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 a majority of the Board of Directors of the Company based upon in office at the time after considering the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval 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 The Company shall issue make a public announcement stating that when the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at and again when such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" share equivalent shall be deemed to have the same value as the Common Shares on such date.
(b2) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series security of Preferred Shares the Company 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 such Preferred Shares (or shares having the same rights, privileges and preferences as such the Preferred Shares ("equivalent preferred shares")) or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Preferred Share or per equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of such Preferred Shares which that the aggregate offering price of the total number of such Preferred Shares or and/or equivalent preferred shares or both so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price, and the denominator of which shall be the number of such Preferred Shares outstanding on such record date date, plus the number of additional such Preferred Shares or and/or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Company, the Rights Agent and the holders of the Rights. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; , and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c3) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness indebtedness, cash (other than a regular quarterly dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly cash dividend referred to above or a dividend payable in such Preferred Shares, but including any dividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares current market price (as defined in determined pursuant to Section 11(d)) hereof) per Preferred Share on such record date, less the then 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a Preferred Share and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesShare. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to section 11(a)(iii) hereof, 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 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to section 11(a)(iii) hereof, 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 ten (10) consecutive Trading Days immediately following such date; provided, however, tha
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event If the Company shall at any time after the date of this Agreement (A) declare pay a dividend on any series of the Preferred Shares Series A Preference Stock payable in Preferred Sharesshares of Series A Preference Stock, (B) subdivide any series of the outstanding Preferred SharesSeries A Preference Stock into a greater number of shares, (C) combine any series of the outstanding Preferred Shares Series A Preference Stock into a smaller number of Preferred Shares shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Series A Preference Stock (including any such reclassification in connection with a consolidation consolidation, merger, share exchange or merger in which division involving the Company is the continuing or surviving corporationCompany), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of immediately prior to 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 Series A Preference Stock or other capital stock issuable on such date, date shall be proportionately adjusted so that the each holder of any a Right exercised after such time shall (except as otherwise provided herein, including Section 7(d)) thereafter be entitled to receive, upon payment of exercise thereof at the Purchase Price then in effecteffect immediately prior to such date, the aggregate number and kind of shares of Series A Preference Stock or other capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares applicable transfer books of the Company were open, he such holder would have owned been entitled to receive upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) If any Acquiring Person Person, alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, then proper provision shall promptly be made so that each holder of a Right, Right shall (except as otherwise provided below and in herein, including Section 7(e7(d), shall ) thereafter have the right be entitled to receive, upon exercise thereof on or after the Distribution Date at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event, in lieu of Series A Preference Stock, such number of duly authorized, validly issued, fully paid and dividing that nonassessable shares of Common Stock of the Company (such shares being referred to herein as the “Adjustment Shares”) as shall be equal to the result obtained by dividing
(x) the product (obtained by multiplying the Purchase Price in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event by the number of one one-hundredth of a share of Series A Preference Stock for which product, following a Right was exercisable immediately prior to such first occurrence, shall occurrence (such product being thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d11(d)(i)) per share of Common Stock on the date of such first occurrence (such number occurrence; provided that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of sharesSection 13, then only the "Adjustment Shares"); provided, that the Purchase Price provisions of Section 13 shall apply and the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In If the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles ’s certificate of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe Purchase Price then in effect, (1A) cash(to the extent available) Common Stock and then, (2B) a reduction in (to the Purchase Price, (3extent available) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed determined to have the same value as be essentially equivalent to shares of Circuit City Common Stock or CarMax Stockin respect to dividend, as applicable liquidation and voting rights (such shares or units of shares of preferred stock are securities being referred to herein called "as “common stock equivalents")”) and then, except to the extent that the Company has not obtained any necessary regulatory approval for such issuanceif necessary, (4C) other equity or debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) cash or other assets, a reduction in the Purchase Price or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been (as determined by the Board of Directors based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors) equal to the value of the Adjustment Shares; provided that (x) the Company may, and (y) if the Company shall not have made adequate provision as required above to deliver value within 30 days following the later of the first occurrence of a Section 11(a)(ii) Event and the first date that the right to redeem the Rights pursuant to Section 23 shall expire, then the Company shall be obligated to, deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, (1) (to the extent available) Common Stock and then (2) (to the extent available) common stock equivalents and then, if necessary, (3) other equity or debt securities of the Company, cash or other assets or any combination of the foregoing, having an aggregate value (as determined by the Board of Directors based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if ) equal to the Company shall not have made adequate provision to deliver excess of the value pursuant to clause (B) above within 30 days following of 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of Adjustment Shares over the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the 30-30 day period set forth above (such period, as it may be extended, being referred to herein as the “Substitution Period”) may be extended to the extent necessary, but not more than 90 days after following the first occurrence of a Section 11(a)(ii) Trigger DateEvent, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period")shares. To the extent that the Company determines that some action need is to be taken pursuant to the first and/or second sentences sentence of this Section 11(a)(iii), the Company (xX) shall provide, subject to Section 7(e) hereof7(d), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (yY) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval shares and/or to decide the appropriate form and value of distribution any consideration to be made pursuant delivered as referred to in such first sentence and to determine the value thereofand/or second sentence. In the event of If any such suspensionsuspension occurs, the Company shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price per share of Common Stock (as determined pursuant to Section 11(d)) hereof) per share on the later of the Common Shares on date of the first occurrence of a Section 11(a)(ii) Trigger Date Event and the value of first date that the right to redeem the Rights pursuant to Section 23 shall expire; any "common stock equivalent" equivalent shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case ; and the Company shall fix a record date for the issuance value of rights, options other securities or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date assets shall be determined by multiplying the Purchase Price in effect immediately prior pursuant to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertibleSection 11(d)(iii). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
event any Person (A) other than the Company, 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 all the Common Shares Subsidiary of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of Company, 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock employee benefit plan of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 Subsidiary of the Company, or any merger entity organized, appointed or consolidation of established by the Company with for or pursuant to the terms of any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Personsuch plan), other than a transaction alone or transactions to which the provisions of Section 13(a) applytogether with its Affiliates and Associates, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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 shall become an Acquiring Person, then, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)) hereof, the holder of any Right which has not theretofore been exercised shall thereafter have the right be entitled to receive, upon exercise thereof of such Right at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Class A Common Stock (in or Class B Common Stock of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company, as shall applicable, equal to the result obtained by (x1) multiplying the then current Purchase Price by the then number of one four-hundredths shares of a Preferred Share Class A Common Stock or Class B Common Stock for which a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(iiand (2) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) on hereof) per share of Common Stock as of the date of such first occurrence (such number of sharesStock Acquisition Date in question; PROVIDED, the "Adjustment Shares"); providedHOWEVER, that if the Purchase Price transaction that would otherwise give rise to the foregoing adjustment also constitutes an event described in Section 13(a), then only the provisions of Section 13 shall apply and the number of Adjustment Shares no adjustment shall be further adjusted as provided in made pursuant to this Agreement to reflect any events occurring after the date of such first occurrenceSection 11(a)(ii).
(iii) In the event that the aggregate number lieu of issuing shares of Circuit City Common Stock or CarMax Stock authorized by in accordance with Section 11(a)(ii) hereof, the Company's Articles Board of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise Directors may, if the Board of Directors determines in its discretion (as evidenced by the vote of a majority of the Rights Directors then in office) that such action is necessary or appropriate and not sufficient contrary to permit the exercise in full interests of the Circuit City Rights or CarMax holders of Rights, as the case may beelect to issue or pay, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, cash (1) cash, (2) a reduction in including an offset against the Purchase Price), (3) Common Shares or other equity securities of the Company (including, without limitationproperty, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Common Stock, as applicable (such shares other securities or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, thereof having an aggregate value equal to the Current Valuevalue of the shares of Common Stock which otherwise would have been issuable pursuant to Section 11(a)(ii), where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Company's Board of Directors (as determined by the Board in its discretion by the vote of a majority of the Company; providedDirectors then in office). For purposes of the preceding sentence, howeverthe value of any preferred stock which the Board of Directors determines to be a "COMMON STOCK EQUIVALENT" shall be deemed to have the same value as the Common Stock. Any such election by the Board of Directors must be made and publicly announced within 90 days of the relevant Stock Acquisition Date. Following the occurrence of an event described in Section 11(a)(ii), if the Company shall not have made adequate provision Board of Directors may (as determined in its discretion by the vote of a majority of the Directors then in office) suspend the exercisability of the Rights for a period of up to deliver value pursuant to clause (B) above within 30 90 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except event to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors has not determined whether to exercise its rights of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval election under this paragraph (such period, as it may be extended, the "Substitution Period"a)(iii). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Common Stock (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares Common Stock) at a price per share of Common Share or equivalent preferred share Stock (or having a conversion price per shareshare of Common Stock, if a security convertible into such Preferred Shares or equivalent preferred sharesCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of such Preferred Shares shares of Common Stock which the aggregate offering price of the total number of such Preferred Shares shares of Common Stock so offered for subscription or equivalent preferred shares or both so to be offered purchase (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such Preferred Shares shares of Common Stock outstanding on such record date date, plus the number of additional such Preferred Shares or equivalent preferred shares or both of Common Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors (as evidenced by the vote of a majority of the Company, Directors then in office) 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 RightsAgent. Preferred Shares of such series 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 adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesCommon Stock, but including any dividend payable in stock other than Common Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Common Stock on such record date, less the fair market value (value, as determined in good faith by the Board of Directors (as evidenced by the vote of a majority of the Company, Directors then in office) whose determination shall be described in a statement filed with the Rights Agent) , of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share a share of Common Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesCommon Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "CURRENT MARKET PRICE" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the 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 "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted sale 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") National Market or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date, as determined in good faith by the Board of Directors (as evidenced by the vote of a majority of the Directors then in office), shall be used. The term "TRADING DAY" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board of Directors (as evidenced by the vote of a majority of the Directors then in office) 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: Rights Agreement (G&k Services Inc)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Series A-1 Common Stock (including including, without limitation, any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on the effective date of such datereclassification, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Series A-1 Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) 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.
(i) Do not remove this number.
(ii) 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 AgreementAgreement is or becomes an Acquiring Person, directly or indirectly, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of event causing such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with become an unaffiliated third party (other than pursuant to Acquiring Person is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement is an acquisition of law or governmental regulation), shares of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or an exchange offer for all outstanding shares of Company Voting Stock at a price and on terms determined prior to such Person's becoming an Acquiring Person by Section 14(d) at least a majority of the Exchange Act members of the Board who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to shareholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority of otherwise in the Continuing Directors shall have determined that such tender offer is fair, 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 best interests of the Company with any of and its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries shareholders (whether or not with or into or otherwise involving an Acquiring Persona “Qualified Offer”), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereofsuch event, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at fifty percent (50%) of the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares Units of Circuit City Series A-1 Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product Event (which productwhich, following such first occurrence, notwithstanding Sections 1(y) and 4(a) shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, however, that the Purchase Price and the number of Adjustment Shares Units for which a Right is exercisable shall be further adjusted as provided in this Agreement to reflect any events event occurring after the date of such first occurrence.
(iii) In the event that after the aggregate Distribution Date or the occurrence of a Section 11(a)(ii) Event the number of shares of Circuit City Series A-1 Common Stock or CarMax Stock which are authorized by the Company's Articles ’s Certificate of Restatement Incorporation, as amended and restated, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is Rights, are not sufficient to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company by vote of a majority of the Board shall: , to the extent permitted by applicable law, including gaming laws, and any material agreements then in effect to which the Company is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable total number of shares of Series A-1 Common Stock that cannot be issued upon the exercise in full of each such Right the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a) (the "“Shortfall Shares”) (the “Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment pro rata number of Shortfall Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares shares, or units of shares, of preferred stock, such as the Company Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Company Common Stock (such shares of preferred stock which the Board of Directors of the Company has deemed or other equity securities being referred to have the same value as shares of Circuit City “Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"Equivalents”), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the Distribution Date or, in the case of a Section 11(a)(ii) Event, 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) Trigger Date"”), then the Company shall be obligated, subject obligated to Section 7(e)deliver, to deliverthe extent permitted by applicable law, including gaming laws, and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Series A-1 Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean (i) the Current Value divided by the number of Rights then outstanding, less (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Series A-1 Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Distribution Date or the Section 11(a)(ii) Trigger Date, as the case may be, in order that the Company may seek shareholder 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 determines that some action need is to be taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y2) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect, each time with prompt notice thereof to the Rights Agent. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common each Shortfall Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (the Common Stock on the Distribution Date or the Section 11(a)(ii) Trigger Date, as defined in Section 11(d)) the case may be, and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Series A-1 Common Stock on such record date. The Board of Directors may, but shall not be required to, establish procedures to allocate the right to receive shares of Series A-1 Common Stock upon exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Company Voting Stock on any date shall be deemed to be the average of the daily closing prices per share of such Company Voting Stock for the thirty (30) consecutive Trading Days immediately prior to such date, less and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Company Voting Stock on any date shall be deemed to be the average of the daily closing prices per share of such Company Voting Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Company Voting Stock is determined during a period following the announcement by the issuer of such Company Voting Stock of (A) a dividend or distribution on such Company Voting Stock payable in shares of such Company Voting Stock or securities convertible into shares of such Company Voting Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Company Voting Stock, 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 ex-dividend trading or such subdivision, combination or reclassification, as applicable. 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 principal United States national securities exchange on which the shares of Company Voting Stock are listed or admitted to trading or, if the shares of Company Voting Stock are not listed or admitted to trading on any United States national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the United States over-the-counter market, as reported by any such system then in use, or, if on any such date the shares of Company Voting Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Company Voting Stock selected by the Board. If on any such date no market maker is making a market in the Company Voting Stock, the fair market value (of such shares on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a day on which the principal United States national securities exchange on which the shares of Directors Company Voting Stock are listed or admitted to trading is open for the transaction of business or, if the Companyshares of Company Voting Stock are not listed or admitted to trading on any United States national securities exchange, a Business Day. If the Company Voting Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) , shall be binding on the Rights Agent and the holders of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share Rights and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madconclusive for all purposes.
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Stock payable in shares of Preferred SharesStock or other capital stock, (B) subdivide any series of the outstanding Preferred SharesStock, (C) combine any series of the outstanding Preferred Shares Stock into a smaller number of Preferred Shares shares, or (D) issue any shares share of its capital stock in a reclassification of any series of the Preferred Shares Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a11(a)(ii) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii)) hereof.
(ii) In the event
(A) event any Acquiring Person alone or any Associate or Affiliate of any Acquiring Persontogether with its Affiliates and Associates, shall, at any time after the date of this Agreementhereof, directly or indirectlybecome an Acquiring Person, (1) shall merge into unless the Company or otherwise combine with the Company and the Company shall event causing such threshold to be the continuing or surviving corporation of such merger or combination and all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to crossed is a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner is an acquisition of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except Stock pursuant to a tender offer made in the manner prescribed or exchange offer for all outstanding shares of Common Stock at a price and on terms determined by Section 14(d) at least a majority of the Exchange Act members of the Board of Directors who are not officers of the Company and the rules and regulations promulgated thereunder; providedwho are not representatives, howevernominees, that Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders (taking into account all factors which such tender offer shall provide for the acquisition of all members of the outstanding shares Board deem relevant including, without limitation, the long-term prospects and value of Circuit City Stock the Company and CarMax Stock held by any Person other than such Acquiring Person and the prices which could reasonably be achieved if the Company or its Associates or Affiliates for cash assets were sold on an orderly basis designed to realize maximum value) and (b) a majority otherwise in the best interests of (1) the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities Company and its stockholders (including any reverse stock split), or recapitalization the possibility that these interests may best be served by the continued independence of the Company), or any merger or consolidation of (2) the Company's employees, suppliers, creditors, customers and (3) the community in which the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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 Personoperates, then, promptly following the first occurrence of any the event described in Section 11(a)(ii)(A), (B) or (C11(a)(ii) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below in Section 11(a)(iii), and in Section 7(e), ) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, Price in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred ShareStock Fractions, such number of shares of Circuit City Common Stock (in of the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share Stock Fractions for which a Right was exercisable by such holder immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which such product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" Price for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares current market price (determined pursuant to Section 11(d)) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, shares of Common Stock is herein called the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock which are authorized by the Company's Articles of Restatement but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient sufficient, or there shall not have been received regulatory approvals necessary, in each case to permit the exercise in full of the Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise payment of such Rightsthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares preferred shares, or units of shares of preferred stock Preferred Stock Fractions), which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Common Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called shares, "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance), (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later first occurrence of (x) the first occurrence of a Section 11(a)(ii) Event and or (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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended by resolution of the Board of Directors of the Company to the extent necessary, but not more than 90 ninety (90) days after following the first occurrence of a Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, provide subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any common stock equivalents shall be deemed to have the same value as the Common Shares Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the shares of Common Stock are principally traded would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the shares of Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of shares of Common Stock or for any other reason, the Company shall: (A) determine the Spread and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) equity securities of the Company, including, without limitation, "common stock equivalents," other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of shares of Common Stock or otherwise cause the prohibition described above, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Section 11(a)(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 Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that an action needs to be taken pursuant to the first sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order 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 purposes of this Section 11(a)(iv), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of any series of Preferred Shares 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 such Preferred Shares Stock, (or shares having the same rights, privileges and preferences as such the Preferred Shares Stock ("equivalent preferred sharesPreferred Stock")) or securities convertible into such Preferred Shares Stock or equivalent preferred shares Preferred Stock at a price per Common Share share of Preferred Stock or equivalent preferred share Preferred Stock (or having a conversion price per share, if a security convertible into such Preferred Shares Stock or equivalent preferred sharesPreferred Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of such shares of Preferred Shares Stock which the aggregate offering price of the total number of such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock so to be offered (or and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price current market price and the denominator of which shall be the number of such shares of Preferred Shares Stock outstanding on such record date date, plus the number of additional such shares of Preferred Shares or Stock and/or equivalent preferred shares or both Preferred Stock to be offered for subscription or purchase (or into onto which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares 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 or assets indebtedness, cash (other than a regular quarterly cash dividend paid out of the earnings or retained earnings of the Company), assets (other than a dividend payable in such Preferred SharesStock, but including any dividend payable in capital stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred Shares (as defined in Section 11(d)) Stock 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such a share of Preferred Share Stock and the denominator of which shall be such Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of such Preferred SharesStock. Such adjustments shall be made successively whenever such a record date is fixed; , and in the event that such distribution is not so madmade, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing price per share of Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the current market price per share of Common Stock on a
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares payable in Preferred Shares, (B) subdivide any series of the outstanding Preferred Shares, (C) combine any series of the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof11 (a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect(and any applicable transfer taxes), the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date Subject to Section 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act event any Person, alone or together with its Affiliates and the rules and regulations promulgated thereunder; providedAssociates, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, or (C) during such time as there is becomes 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e)below, shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the then current Purchase PricePrice multiplied by the number of one one-hundredths of a Preferred Share for which a Right would otherwise be then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one four-hundredths of a Preferred ShareShares, such number of shares Common Shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one fourone-hundredths of a Preferred Share for which a Right was would otherwise be then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price then current per share market price of the applicable series of Company's Common Shares (determined pursuant to Section 11(d)) hereof) on the date of the occurrence of such first occurrence (such number of shares, 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); and provided further that the Purchase Price and the number of Adjustment Shares adjustment set forth in this Section 11(a)(ii) shall be effective only at and after the time at which the authority of the Board of Directors of the Company to redeem the Rights pursuant to Section 23(b), as such Section may be amended pursuant to Section 27, shall have terminated. Notwithstanding the foregoing, in the event any Person shall become an Acquiring Person, any Rights that are or, after becoming an Acquiring Person, were beneficially owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall become null and void at the time of such event without any further adjusted as provided in action, and no holder of such Rights shall thereafter have any right to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to reflect Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any events occurring after Associate or Affiliate of any Acquiring Person whose Rights would be void pursuant to the date preceding sentence; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such first occurrenceAcquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if the Company's Board of Directors determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, in the event that the aggregate number of shares of Circuit City Stock or CarMax Stock Common Shares which are authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of each such a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madthe
Appears in 1 contract
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any series of the Preferred Shares Common Stock payable in Preferred Sharesshares of Common Stock, (B) subdivide any series of the outstanding Preferred SharesCommon Stock, (C) combine any series of the outstanding Preferred Shares Common Stock into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock in a reclassification of any series of the Preferred Shares Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Common Stock or capital stock stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Common Stock or capital stock stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In Subject to Section 24, in the event
(A) event any Person 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 all event, the Common Shares 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, “Flip-in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its SubsidiariesEvent”), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, Right (except as provided below and in Section 7(e), ) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then then-current Purchase Price, Price for a whole share of Common Stock in accordance with the terms of this Agreement, in lieu of a the number of one four-hundredths shares of a Preferred ShareCommon Stock otherwise receivable upon exercise, such number of shares of Circuit City Common Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (xA) multiplying the then then-current Purchase Price for a whole share of Common Stock by the then number of one four-hundredths halves of a Preferred Share share of Common Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(iiFlip-in Event and (B) Event, and dividing that product (which productwhich, following such first occurrence, occurrence shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) Stock on the date of such first occurrence (such number of shares, the "“Adjustment Shares"”); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Common Stock or CarMax Stock that are authorized by the Company's Articles ’s Amended and Restated Certificate of Restatement Incorporation, as the same may be amended from time to time, 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such a Right (the "“Current Value") over (2) the Purchase Price (such excess, the "Spread"”), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Rightsa Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares Stock or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuanceCompany, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (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 Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x1) the first occurrence of a Section 11(a)(ii) Flip-in Event and (y2) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x1) and (y2) being referred to herein as the "Section 11(a)(ii) “Flip-in Trigger Date"”), then the Company shall be obligated, subject to Section 7(e), obligated to deliver, upon the surrender for exercise of each such a Right and without requiring payment of the Purchase Price, shares of Common Shares Stock (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, ) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the immediately preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Shares Stock could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtainedthe Rights, the thirty (30-) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Flip-in Trigger Date, in order that the Company may seek shareholder 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, the "“Substitution Period"”). To the extent that the Company determines that some action need should be taken pursuant to the first and/or second sentences sentence or third sentence of this Section 11(a)(iii), the Company (xA) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (yB) may suspend the exercisability of such the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares, to take any action to obtain any required regulatory approval 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 such 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 notice of such announcements to the Rights Agent). For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common each Adjustment Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined Common Stock on the Flip-in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so madTrigger Date.
Appears in 1 contract
Sources: Rights Agreement (Synalloy Corp)
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend distribution on any series of the Preferred Common Shares payable in Preferred Common Shares, (B) subdivide any series of the outstanding Preferred Common Shares, (C) combine any series of the outstanding Preferred Common Shares into a smaller number of Preferred Shares shares, or (D) issue any shares of its capital stock member interests in a reclassification of any series of the Preferred Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporationentity), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, then the Purchase Price in effect at the time of the record date for such dividend distribution or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock Common Shares or member interests, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of capital stock whichCommon Shares or member interests, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividenddistribution, subdivision, combination or reclassification. 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) 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 all the Common Shares 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 or any of its Subsidiaries in exchange (in whole or in part) for shares of any class or series of capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class or series of capital stock of the Company or any of its Subsidiaries or securities exercisable for or convertible into shares of any class or series of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution to all holders of such shares of any class or series of capital stock of the Company or any of its Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of its Subsidiaries, assets (including securities) 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 party (other than pursuant to a transaction set forth in Section 13(a) hereof), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose (in one or more transactions), to, from, with or of, as the case may be, the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than $2 million (other than pursuant to a transaction set forth in Section 13(a) hereof), (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 and except if resulting from a requirement of law or governmental regulation), of any loans, 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 shall become the Beneficial Owner of Common Shares representing 15% or more of the total Voting Rights of all the Common Shares of the Company then outstanding except pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (a) such tender offer shall provide for the acquisition of all of the outstanding shares of Circuit City Stock and CarMax Stock held by any Person other than such Acquiring Person and its Associates or Affiliates for cash and (b) a majority of the Continuing Directors shall have determined that such tender offer is fair, 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 involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction or transactions to which the provisions of Section 13(a) apply, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class or series of equity securities or of securities exercisable for or convertible into 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, promptly following the occurrence of any event described in Section 11(a)(ii)(A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e), shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price, in accordance with the terms of this Agreement, in lieu of a number of one four-hundredths of a Preferred Share, such number of shares of Circuit City Stock (in the case of a Circuit City Right) or CarMax Stock (in the case of a CarMax Right) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one four-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product (which product, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (y) 50% of the Current Market Price per share of the applicable series of Common Shares (determined pursuant to Section 11(d)) on the date of such first occurrence (such number of shares, the "Adjustment Shares"); provided, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence.
(iii) In the event that the aggregate number of shares of Circuit City Stock or CarMax Stock authorized by the Company's Articles of Restatement 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 Circuit City Rights or CarMax Rights, as the case may be, in accordance with the foregoing subparagraph (ii) of this Section 11(a), or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each such Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of such Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares or units of shares of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Circuit City Stock or CarMax Stock, as applicable (such shares or units of shares of preferred stock are herein called "common stock equivalents"), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 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) Trigger Date"), then the Company shall be obligated, subject to Section 7(e), to deliver, upon the surrender for exercise of each such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of such Rights or that any necessary regulatory approval for such issuance will be obtained, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Circuit City Rights or CarMax Rights, as the case may be, and (y) may suspend the exercisability of such Rights until the expiration of the Substitution Period in order to seek any authorization of additional 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 shall issue a public announcement stating that the exercisability of such Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase such Preferred Shares (or shares having the same rights, privileges and preferences as such Preferred Shares ("equivalent preferred shares") or securities convertible into such Preferred Shares or equivalent preferred shares at a price per Common Share or equivalent preferred share (or having a conversion price per share, if a security convertible into such Preferred Shares or equivalent preferred shares) less than the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of such Preferred Shares which the aggregate offering price of the total number of such Preferred Shares or equivalent preferred shares or both so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of such Preferred Shares outstanding on such record date plus the number of additional such Preferred Shares or equivalent preferred shares or both to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, 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. Preferred Shares of such series owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in such Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of such Preferred Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one such Preferred Share and the denominator of which shall be such Current Market Price per share of such Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so mad
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