STOCKHOLDER PROTECTION RIGHTS AGREEMENT dated as of July 24, 2016 between TERRAFORM POWER, INC. and COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
July 24, 2016
between
TERRAFORM POWER, INC.
and
COMPUTERSHARE TRUST COMPANY, N.A.,
as Rights Agent
-i-
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
ARTICLE I
DEFINITIONS
1.1 Definitions................................................................................................................2
ARTICLE II
THE RIGHTS
2.1 Summary of Rights ................................................................................................22
2.2 Legend....................................................................................................................22
2.3 Exercise of Rights; Separation of Rights ...............................................................23
2.4 Adjustments to Exercise Price; Number of Rights ................................................28
2.5 Date on Which Exercise is Effective .....................................................................30
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates ................31
2.7 Registration, Registration of Transfer and Exchange ............................................32
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates....................................34
2.9 Persons Deemed Owners .......................................................................................35
2.10 Delivery and Cancellation of Certificates ..............................................................36
2.11 Agreement of Rights Holders ................................................................................36
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in .....................................................................................................................38
3.2 Flip-over .................................................................................................................44
ARTICLE IV
THE RIGHTS AGENT
4.1 General ...................................................................................................................45
4.2 Merger or Consolidation or Change of Name of Rights Agent .............................47
4.3 Duties of Rights Agent...........................................................................................48
4.4 Change of Rights Agent .........................................................................................55
-ii-
ARTICLE V
MISCELLANEOUS
5.1 Redemption ............................................................................................................57
5.2 Expiration ...............................................................................................................61
5.3 Issuance of New Rights Certificates ......................................................................61
5.4 Supplements and Amendments ..............................................................................63
5.5 Fractional Shares ....................................................................................................64
5.6 Rights of Action .....................................................................................................65
5.7 Holder of Rights Not Deemed a Stockholder ........................................................66
5.8 Notice of Proposed Actions ...................................................................................66
5.9 Notices ...................................................................................................................66
5.10 Suspension of Exercisability or Exchangeability ..................................................67
5.11 Successors ..............................................................................................................68
5.12 Benefits of this Agreement ....................................................................................68
5.13 Determination and Actions by the Board of Directors, etc. ...................................68
5.14 Descriptive Headings; Section References ............................................................69
5.15 GOVERNING LAW; EXCLUSIVE JURISDICTION ....................................70
5.16 Counterparts ...........................................................................................................71
5.17 Severability ............................................................................................................71
5.18 Customer Identification Program ...........................................................................72
5.19 Withholding ...........................................................................................................72
EXHIBITS
Exhibit A Form of Rights Certificate (together with Form of Election to Exercise)
Exhibit B Form of Certificate of Designation and Terms of Participating Preferred
Stock
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended
from time to time, this “Agreement”), dated as of July 24, 2016, between TerraForm
Power, Inc., a Delaware corporation (the “Company”), and Computershare Trust
Company, N.A., a federally chartered trust company, as Rights Agent (the “Rights
Agent”, which term shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company (the “Board of
Directors”) has (a) authorized and declared a dividend of one right (“Right”) in respect of
each share of Class A Common Stock (as hereinafter defined) held of record as of the
Close of Business (as hereinafter defined) on August 4, 2016 (the “Record Time”) and
(b) as provided in Section 2.4, authorized the issuance of one Right in respect of each
share of Class A Common Stock issued after the Record Time and prior to the Separation
Time (as hereinafter defined) and, to the extent provided in Section 5.3, each share of
Class A Common Stock issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each Right entitles
the holder thereof, after the Separation Time, to purchase securities or assets of the
Company (or, in certain cases, securities of certain other entities) pursuant to the terms
and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection with the
issuance, transfer and exchange of Rights Certificates (as hereinafter defined), the
exercise of Rights and other matters referred to herein;
-2-
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:
“Acquiring Person” shall mean any Person who is or becomes the
Beneficial Owner of 15% or more of the outstanding shares of Class A Common Stock at
any time after the first public announcement of this Agreement; provided, however, that
the term “Acquiring Person” shall not include any Person: (i) who is the Beneficial
Owner of 15% or more of the outstanding shares of Class A Common Stock at the time
of the first public announcement of the adoption of this Agreement and who continuously
thereafter is the Beneficial Owner of 15% or more of the outstanding shares of Class A
Common Stock, until such time thereafter as such Person becomes the Beneficial Owner
(other than by means of a stock dividend, stock split or reclassification) of additional
shares of Class A Common Stock that, in the aggregate, amount to 0.1% or more of the
outstanding shares of Class A Common Stock; provided, however, that, for purposes of
this definition and notwithstanding anything to the contrary in this Agreement, such
Person (and any group (as such term is used in Rule 13d-5 under the Exchange Act, as
such Rule is in effect on the date of this Agreement) of which such Person is a part at the
time of the first public announcement of the adoption of this Agreement) shall be deemed
not to continue to Beneficially Own shares of Class A Common Stock that were
-3-
Beneficially Owned at the time of the first public announcement of the adoption of this
Agreement if and to the extent that, at any time after the first public announcement of this
Agreement, (A) such Person converts, exchanges, swaps, sells or otherwise disposes of
Beneficial Ownership of any Cash Settled Synthetic Long Position held in respect of such
shares of Class A Common Stock and concurrently or subsequently acquires Beneficial
Ownership of any Class A Common Stock, or otherwise ceases to Constructively Own
such shares of Class A Common Stock or (B) such Person or any of such Person’s
Affiliates or Associates (x) exercises its right to acquire such shares of Class A Common
Stock pursuant to any agreement, arrangement or understanding in place at the time of
the first public announcement of the adoption of this Agreement (including any exercise
of conversion rights, exchange rights, rights (other than the Rights), rights of first offer or
first refusal, warrants or options), or (y) acquires or enters into a definitive agreement to
acquire (whether or not subject to conditions) such shares of Class A Common Stock
from any other Person (or any Affiliate or Associate thereof) that is not an Affiliate or
Associate of such Person with whom, at the time of the first public announcement of the
adoption of this Agreement, such Person has formed or is part of a group (as such term is
used in Rule 13d-5 under the Exchange Act, as such Rule is in effect on the date of this
Agreement), in the case of (x) and (y), whether or not such Person is deemed to be the
beneficial owner of such shares pursuant to Rule 13d-3 and 13d-5 under the Exchange
Act, as such Rules are in effect on the date of this Agreement, prior to any such exercise
or acquisition; provided, further, that, with respect to any Person, the exchange of any
Class B Units of Terraform Power, LLC (“Terra LLC”) Beneficially Owned by such
-4-
Person, together with corresponding shares of Class B Common Stock Beneficially
Owned by such Person, for newly issued or existing shares of Class A Common Stock in
accordance with the Company’s certificate of incorporation and bylaws and the limited
liability company agreement of Terra LLC then in effect shall not result in such Person
becoming an Acquiring Person; (ii) who becomes the Beneficial Owner of 15% or more
of the outstanding shares of Class A Common Stock after the time of the first public
announcement of this Agreement solely as a result of (A) an acquisition by the Company
of shares of Class A Common Stock until such time after the public announcement by the
Company of such repurchases as such Person becomes the Beneficial Owner (other than
by means of a stock dividend, stock split or reclassification) of additional shares of Class
A Common Stock that, in the aggregate, amounts to 0.1% or more of the outstanding
shares of Class A Common Stock while such Person is or as a result of which such
Person becomes the Beneficial Owner of 15% or more of the outstanding shares of Class
A Common Stock or (B) the occurrence of a Flip-in Date which has not resulted from the
acquisition of Beneficial Ownership of Class A Common Stock by such Person or any of
such Person’s Affiliates or Associates; (iii) who becomes the Beneficial Owner of 15% or
more of the outstanding shares of Class A Common Stock but who acquired Beneficial
Ownership of shares of Class A Common Stock without any plan or intention to seek or
affect control of the Company, if such Person promptly divests, or promptly enters into
an agreement with, and satisfactory to, the Board of Directors, in the Board of Directors’
sole discretion, to divest, and subsequently divests in accordance with the terms of such
agreement (without exercising or retaining any power, including voting power, with
-5-
respect to such shares), sufficient shares of Class A Common Stock (or securities
convertible into, exchangeable into or exercisable for Class A Common Stock or
otherwise deemed to be Beneficially Owned by such Person) so that such Person ceases
to be the Beneficial Owner of 15% or more of the outstanding shares of Class A Common
Stock; or (iv) who Beneficially Owns shares of Class A Common Stock consisting solely
of one or more of (A) shares of Class A Common Stock Beneficially Owned pursuant to
the grant or exercise of an option granted to such Person (an “Option Holder”) by the
Company in connection with an agreement to merge with, or acquire, the Company
entered into with the Company prior to a Flip-in Date, (B) shares of Class A Common
Stock (or securities convertible into, exchangeable into or exercisable for Class A
Common Stock or otherwise deemed to be Beneficially Owned by such Person)
Beneficially Owned by such Option Holder or its Affiliates or Associates at the time of
grant of such option and (C) shares of Class A Common Stock (or securities convertible
into, exchangeable into or exercisable for Class A Common Stock or otherwise deemed
to be Beneficially Owned by such Person) acquired by Affiliates or Associates of such
Option Holder after the time of such grant that, in the aggregate, amount to less than 1%
of the outstanding shares of Class A Common Stock. In no event shall SunEdison, any of
its controlled Affiliates or any Person acquiring, directly or indirectly, control of
SunEdison be an Acquiring Person. In addition, the Company, any Subsidiary of the
Company and any employee stock ownership or other employee benefit plan of the
Company or a Subsidiary of the Company (or any entity or trustee holding shares of
Common Stock for or pursuant to the terms of any such plan or for the purpose of
-6-
funding any such plan or funding other employee benefits for employees of the Company
or of any Subsidiary of the Company) shall not be an Acquiring Person.
“Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act, as such Rule is in effect on the date of
this Agreement.
“Agreement” shall have the meaning set forth in the Preamble.
A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial
Ownership” of, and to “Beneficially Own”, (i) any securities as to which such Person or
any of such Person’s Affiliates or Associates is or may be deemed to be the beneficial
owner pursuant to Rule 13d-3 and 13d-5 under the Exchange Act, as such Rules are in
effect on the date of this Agreement, (ii) any securities as to which such Person or any of
such Person’s Affiliates or Associates has the right to become the beneficial owner
(whether such right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement or understanding,
whether or not in writing (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise, and (iii) any securities which are
Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or
Associate thereof) with whom such Person has an agreement, arrangement or
understanding to act together for the purpose of acquiring, holding, voting or disposing of
any securities of the Company and (iv) solely for purposes of determining whether any
-7-
Person is an Acquiring Person, any securities that such Person or any of such Person’s
Affiliates or Associates are determined to Constructively Own; provided, however, that a
Person shall not be deemed the “Beneficial Owner”, or to have “Beneficial Ownership”
of, or to “Beneficially Own”, any security (A) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of such
Person’s Affiliates or Associates until such tendered security is accepted for payment or
exchange or (B) solely because such Person or any of such Person’s Affiliates or
Associates has or shares the power to vote or direct the voting of such security pursuant
to a revocable proxy or consent given in response to a public proxy or consent solicitation
made to more than ten holders of shares of a class of stock of the Company registered
under Section 12 of the Exchange Act and pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, unless such power (or the
arrangements relating thereto) is then reportable under Item 6 of Schedule 13D under the
Exchange Act (or any similar provision of a comparable or successor report).
Notwithstanding the foregoing, no officer or director of the Company shall be deemed to
Beneficially Own any securities of any other Person by virtue of any actions that such
officer or director takes in such capacity. For purposes of this Agreement, in determining
the percentage of the outstanding shares of Class A Common Stock with respect to which
a Person is the Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding but any such shares which are not
outstanding shall not be deemed to be outstanding for the purpose of computing the
-8-
percentage of the outstanding shares of Class A Common Stock with respect to which
any other Person is the Beneficial Owner.
“Board of Directors” shall have the meaning set forth in the Recitals.
“Business Day” shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York, New York are generally authorized or
obligated by law or executive order to close.
“Cash Settled Synthetic Long Position” shall mean any Synthetic Long
Position which is not required to be, or not capable of being, settled through delivery of
Class A Common Stock.
“Class A Common Stock” shall mean the shares of Class A Common
Stock, par value $0.01 per share, of the Company.
“Class B Common Stock” shall mean the shares of Class B Common
Stock, par value $0.01 per share, of the Company.
“Close of Business” on any given date shall mean 5:00 p.m. New York
City time on such date or, if such date is not a Business Day, 5:00 p.m. New York City
time on the next succeeding Business Day.
“Common Stock” shall mean the Class A Common Stock and Class B
Common Stock.
“Company” shall have the meaning set forth in the preamble.
A Person shall be determined to “Constructively Own” shares of Class A
Common Stock in respect of which such Person has a Synthetic Long Position, calculated
in the manner set forth below, if the Board of Directors, by a majority vote, determines
-9-
that such Person is seeking to use the existence of such Synthetic Long Position, in
combination with other securities Beneficially Owned by such Person, for the purpose or
effect of changing or influencing control of the Company. The number of shares of Class
A Common Stock in respect of a Synthetic Long Position that may be determined to be
“Constructively Owned” is the notional or other number of shares of Class A Common
Stock in respect of such Synthetic Long Position that is specified in a filing by such
Person or any of such Person’s Affiliates or Associates with the Securities and Exchange
Commission or in the documentation evidencing such Synthetic Long Position as the
basis upon which the value or settlement amount of such right or derivative, or the
opportunity of the holder of such right or derivative to profit or share in any profit, is to
be calculated in whole or in part and, in any case, including if no such number of shares
of Class A Common Stock is specified in any filing or documentation, as determined by
the Board of Directors to be the number of shares of Class A Common Stock to which
such Synthetic Long Position relates.
“Election to Exercise” shall have the meaning set forth in Section 2.3(d).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
“Exchange Ratio” shall have the meaning set forth in Section 3.1(c).
“Exchange Time” shall have the meaning set forth in Section 3.1(c).
“Exercise Price” shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until adjustment
thereof in accordance with the terms hereof, the Exercise Price shall equal $40.
-10-
“Expansion Factor” shall have the meaning set forth in Section 2.4(a).
“Expiration Time” shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the Close of Business on the date of the first annual
stockholders meeting of the Company to be held on or after January 1, 2017, unless, for
purposes of this clause (iii), extended by action of the Board of Directors with the
approval of the stockholders of the Company holding a majority of the voting power of
the shares of Common Stock then outstanding (in which case the applicable time shall be
the time to which it has been so extended, provided that in no event shall the Expiration
Time be extended beyond the third anniversary of the date of this Agreement),
(iv) immediately prior to the effective time of a consolidation, merger or statutory share
exchange that does not constitute a Flip-over Transaction or Event in which the Class A
Common Stock is converted into, or into the right to receive, another security, cash or
other consideration, and (v) immediately prior to the acquisition by one or more persons,
directly or indirectly, by means of a negotiated transaction or series of related
transactions involving SunEdison, Inc. (“SunEdison”), including, without limitation,
through any reorganization, acquisition or other transaction resulting in a change of
control of SunEdison, of all or substantially all of the shares of Common Stock
Beneficially Owned by SunEdison. The Company shall provide the Rights Agent with
prompt written notice of any extension of the Expiration Time.
“Flip-in Date” shall mean any Stock Acquisition Date or such later date
and time as the Board of Directors may from time to time fix by resolution adopted prior
to the Flip-in Date that would otherwise have occurred.
-11-
“Flip-over Entity,” for purposes of Section 3.2, shall mean (i) in the case
of a Flip-over Transaction or Event described in clause (i) of the definition thereof, the
Person issuing any securities into which shares of Class A Common Stock are being
converted or exchanged and, if no such securities are being issued, the other Person that
is a party to such Flip-over Transaction or Event and (ii) in the case of a Flip-over
Transaction or Event referenced in clause (ii) of the definition thereof, the Person
receiving the greatest portion of the (A) assets or, if (A) is not readily determinable,
(B) operating income or cash flow being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a Subsidiary of another Person, the ultimate
parent entity of such Person shall be the Flip-over Entity.
“Flip-over Stock” shall mean the capital stock (or similar equity interest)
with the greatest voting power in respect of the election of directors (or other Persons
similarly responsible for the direction of the business and affairs) of the Flip-over Entity.
“Flip-over Transaction or Event” shall mean a transaction or series of
transactions, on or after a Flip-in Date, in which, directly or indirectly, (i) the Company
shall consolidate or merge or participate in a statutory share exchange with any other
Person if, immediately prior to the time of consummation of the consolidation, merger or
statutory share exchange or at the time the Company enters into any agreement with
respect to any such consolidation, merger or statutory share exchange, the Acquiring
Person is the Beneficial Owner of 50% or more of the outstanding shares of Class A
Common Stock or controls the Board of Directors and either (A) any term of or
arrangement concerning the treatment of shares of capital stock in such consolidation,
-12-
merger or statutory share exchange relating to the Acquiring Person is not identical to the
terms and arrangements relating to other holders of the Class A Common Stock or (B) the
Person with whom the transaction or series of transactions occurs is the Acquiring Person
or an Affiliate or Associate of the Acquiring Person or (ii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either book value or
fair market value) or (B) generating more than 50% of the operating income or cash flow,
of the Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons that are Affiliates or Associates or otherwise acting in concert, if, at the time of
the entry by the Company (or any such Subsidiary) into an agreement with respect to
such sale or transfer of assets, the Acquiring Person or any of its Affiliates or Associates
controls the Board of Directors. For purposes of the foregoing description, the term
“Acquiring Person” shall include any Acquiring Person and its Affiliates and Associates,
counted together as a single Person. An Acquiring Person shall be deemed to control the
Board of Directors when, on or following a Stock Acquisition Date, the persons who
were directors of the Company (or persons nominated and/or appointed as directors by
vote of a majority of such persons) before the Stock Acquisition Date shall cease to
constitute a majority of the Board of Directors.
“Market Price” per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as described
below) on each of the 20 consecutive Trading Days through and including the Trading
-13-
Day immediately preceding such date; provided, however, that if any event described in
Section 2.4, or any analogous event, shall have caused the closing prices used to
determine the Market Price on any Trading Days during such period of 20 Trading Days
not to be fully comparable with the closing price on such date, each such closing price so
used shall be appropriately adjusted by the Board of Directors in order to make it fully
comparable with the closing price on such date. The closing price per share of any
securities on any date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed on the NYSE
or, if the securities are not listed on the NYSE, as reported on NASDAQ or, if the
securities are not listed on NASDAQ, as reported in the principal consolidated
transaction reporting system with respect to the principal national securities exchange on
which the securities are listed or admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, as reported by such other
quotation system then in use or, if on any such date the securities are not listed or
admitted to trading on any national securities exchange or quoted by any such quotation
system, the average of the closing bid and asked prices in the over-the-counter market as
furnished by a professional market maker making a market in the securities selected by
the Board of Directors; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or traded in the over-the-
counter market, the closing price per share of such securities on such date shall mean the
-14-
fair value per share of such securities on such date as determined in good faith by the
Board of Directors, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
“NYSE” means the New York Stock Exchange.
“NASDAQ” means the NASDAQ Stock Market.
“Option Holder” shall have the meaning set forth in the definition of
Acquiring Person.
“Person” shall mean any individual, firm, partnership, limited liability
company, trust, association, group (as such term is used in Rule 13d-5 under the
Exchange Act, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
“Preferred Stock” shall mean the series of Participating Preferred Stock,
par value $0.01 per share, of the Company created by a Certificate of Designation and
Terms in substantially the form set forth in Exhibit B hereto appropriately completed.
“Qualified Offer” shall mean an offer that has, to the extent required for
the type of offer specified, each of the following characteristics:
(i) a fully financed all-cash tender offer or an exchange offer offering
common stock of the offeror or a combination thereof, in each such case for any and all
of the outstanding Class A Common Stock of the Company;
(ii) an offer that has commenced within the meaning of Rule 14d-2(a)
under the Exchange Act;
-15-
(iii) an offer that within 20 Business Days after the commencement
date of the offer within the meaning of Rule 14d-2(a) under the Exchange Act (or within
10 Business Days after any increase in the offer consideration), does not result in a
nationally recognized investment banking firm retained by the Board of Directors
rendering an opinion to the Board of Directors that the consideration being offered to the
holders of the Class A Common Stock is either unfair or inadequate;
(iv) an offer that is subject only to the minimum tender condition
described below in item (vi) of this definition and other usual and customary terms and
conditions, which may include a condition that no change or event has resulted in, or is
reasonably expected to result in, a material adverse effect on the business, financial
condition, assets, liabilities or results of operations of the Company, which conditions
shall not include any financing, funding, due diligence or similar condition;
(v) an offer pursuant to which the Company has received an
irrevocable written commitment of the offeror that the offer will remain open for at least
40 Business Days and, if a Special Meeting is duly requested in accordance with Section
5.1(d), for at least 10 Business Days after the date of the Special Meeting or, if no Special
Meeting is held within 90 Business Days following receipt of the Special Meeting Notice
in accordance with Section 5.1(d), for at least 10 Business Days following such 90
Business Day period; provided, however, that such offer need not remain open, as a result
of this definition of “Qualified Offer,” beyond (A) the time until which any other offer
satisfying the criteria for a Qualified Offer is then required to be kept open under this
definition of “Qualified Offer,” or (B) the scheduled expiration date, as such date may be
-16-
extended by public announcement on or prior to the then scheduled expiration date, of
any other tender or exchange offer for Class A Common Stock of the Company with
respect to which the Board of Directors has agreed to redeem the Rights immediately
prior to acceptance for payment of the Class A Common Stock thereunder (unless such
other offer is terminated prior to its expiration without any Class A Common Stock
having been purchased thereunder);
(vi) an offer that is conditioned on a minimum of at least 50% of the
outstanding shares of Class A Common Stock (other than shares of Class A Common
Stock held by the offeror or its Affiliates and Associates) being tendered and not
withdrawn as of the offer’s expiration date, which condition shall not be waivable;
(vii) an offer pursuant to which the Company has received an
irrevocable written commitment by the offeror to consummate as promptly as practicable
upon successful completion of the offer a second step transaction whereby all shares of
Common Stock not tendered into the offer will be acquired for the same amount and form
of consideration per share actually paid pursuant to the offer, subject to stockholders’
statutory appraisal rights, if any;
(viii) an offer pursuant to which the Company has received an
irrevocable written commitment of the offeror that no amendments will be made to the
offer to reduce the offer consideration (other than a reduction to reflect any dividend
declared by the Company after the commencement of such offer within the meaning of
Rule 14d-2(a) under the Exchange Act or any material change in the capital structure of
the Company initiated by the Company after the commencement of such offer, whether
-17-
by way of reclassification, recapitalization, reorganization, repurchase or otherwise),
change the form of consideration offered, reduce the number of shares being sought, or
otherwise change the terms of the offer in a way that is adverse to a tendering
shareholder; and
(ix) if the offer includes common stock of the offeror, (A) the offeror is
a publicly owned corporation, and its common stock is freely tradable and is listed or
admitted to trading on the New York Stock Exchange, the Nasdaq Global Market or the
Nasdaq Global Select Market, (B) no stockholder approval of the offeror is required to
issue such common stock or, if required, such approval has already been obtained, and
(C) no other class of voting stock of the offeror is outstanding, and the offeror meets the
registrant eligibility requirements for use of Form S-3 for registering securities under the
Securities Act of 1933, as amended, including, without limitation, the filing of all
required Exchange Act reports in a timely manner during the twelve calendar months
prior to the date of commencement of the offer within the meaning of Rule 14d-2(a)
under the Exchange Act.
For the purposes of this definition of “Qualified Offer,” “fully financed”
shall mean that the offeror has sufficient funds for the offer which shall be evidenced by
(A) definitive financing agreements executed between the offeror and responsible
financial institutions having the necessary financial capacity to provide funds for such
offer subject only to customary terms and conditions (which shall in no event include
conditions requiring access by such financial institutions to non-public information to be
provided by the Company, conditions based on the accuracy of any information
-18-
concerning the Company, or conditions requiring the Company to make any
representations, warranties or covenants in connection with such financing), (B) cash or
cash equivalents then available to the offeror, set apart and maintained solely for the
purpose of funding the offer with an irrevocable written commitment being provided by
the offeror to the Company to maintain such availability until the offer is consummated
or withdrawn, or (C) a combination of the foregoing; which evidence (including certified
copies of any such definitive financing agreements (including exhibits and related
documents) and copies of all written materials prepared by the offeror for such financial
institutions in connection with entering into such financing agreements) has been
provided to the Company prior to, or upon, commencement of the offer within the
meaning of Rule 14d-2(a) under the Exchange Act; provided, that “sufficient funds for
the offer” shall be an amount sufficient to pay for all shares of Common Stock
outstanding on a fully diluted basis the cash portion of the consideration pursuant to the
offer and the second-step transaction required by clause (ix) above and all related
expenses. If an offer becomes a Qualified Offer in accordance with this definition but
subsequently ceases to be a Qualified Offer as a result of the failure at a later date to
continue to satisfy any of the requirements of this definition, such offer shall cease to be a
Qualified Offer and the provisions of Section 5.1(d) shall no longer be applicable to such
offer, provided the actual redemption of the Rights pursuant to Section 5.1(d) shall not
have already occurred.
“Record Time” shall have the meaning set forth in the Recitals.
“Redemption Price” shall mean an amount equal to one cent, $0.01.
-19-
“Redemption Resolution” shall have the meaning set forth in Section
5.1(d).
“Redemption Time” shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1.
“Right” shall have the meaning set forth in the Recitals.
“Rights Agent” shall have the meaning set forth in the Preamble.
“Rights Certificate” shall have the meaning set forth in Section 2.3(c).
“Rights Register” shall have the meaning set forth in Section 2.7(a).
“Separation Time” shall mean the next Business Day following the earlier
of (i) the tenth Business Day (or such later date as the Board of Directors may from time
to time fix by resolution adopted prior to the Separation Time that otherwise would have
occurred) after the date on which any Person commences a tender or exchange offer that,
if consummated, would result in such Person’s becoming an Acquiring Person and (ii) the
date of the first event causing a Flip-in Date to occur; provided, that if the foregoing
results in the Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time and provided, further, that if any tender or exchange offer referenced
in clause (i) of this paragraph is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Class A Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never to have been
made.
“Special Meeting” shall have the meaning set forth in Section 5.1(d).
-20-
“Special Meeting Notice” shall have the meaning set forth in Section
5.1(d).
“Stock Acquisition Date” shall mean the first date on which there shall be
a public announcement by the Company (by any means) that a Person has become an
Acquiring Person, which announcement makes express reference to such status as an
Acquiring Person pursuant to this Agreement.
“Subsidiary” of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a majority of the
equity or membership interest is Beneficially Owned, directly or indirectly, by such
Person.
“SunEdison” shall have the meaning set forth in the definition of
Expiration Time.
“Synthetic Long Position” shall mean any option, warrant, convertible
security, stock appreciation right, swap agreement or other security, contract right or
derivative position, whether or not presently exercisable, that has an exercise or
conversion privilege or a settlement payment or other mechanism at a price related to the
value of Class A Common Stock or a value determined in whole or part with reference to,
or derived in whole or in part from, the value of Class A Common Stock and that
increases in value as the value of Class A Common Stock increases or that provides to the
holder an opportunity, directly or indirectly, to profit or share in any profit derived from
any increase in the value of Class A Common Stock, in any case without regard to
whether (i) such derivative conveys any voting rights in such securities to such Person or
-21-
any of such Person’s Affiliates or Associates, (ii) such derivative is required to be, or
capable of being, settled through delivery of such securities, or (iii) such Person or any of
such Person’s Affiliates or Associates may have entered into other transactions that hedge
the economic effect of such derivative. A Synthetic Long Position shall not include any
interests, rights, options or other securities set forth in Rule 16a-1(c)(1)-(5) or (7)
promulgated pursuant to the Exchange Act or the Class B Common Stock.
“Terra LLC” shall have the meaning set forth in the definition of
Acquiring Person.
“Trading Day”, when used with respect to any securities, shall mean a day
on which the NYSE is open for the transaction of business or, if such securities are not
listed or admitted to trading on the NYSE, a day on which the principal national
securities exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to trading on
any national securities exchange, a Business Day.
“Trading Regulation” shall have the meaning set forth in Section 2.3(c).
“Trust” shall have the meaning set forth in Section 3.1(c).
“Trust Agreement” shall have the meaning set forth in Section 3.1(c).
“Vice President”, when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before or
after the title “vice president.”
-22-
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a letter summarizing the terms of the Rights to each holder of
record of Class A Common Stock as of the Record Time, at such holder’s address as
shown by the records of the Company.
2.2 Legend. Certificates for the Class A Common Stock or, if a
certificate has not been issued, the registration of the Class A Common Stock on the
stock transfer books of the Company, issued on or after the Record Time but prior to the
Separation Time, shall evidence one Right for each share of Class A Common Stock
represented thereby and the Company shall mail to every Person that acquires Class A
Common Stock after the Record Time, but prior to the Separation Time, either
certificates for such Class A Common Stock or a confirmation of the registration of such
Class A Common Stock on the stock transfer books of the Company, which certificates
or confirmation shall have impressed on, printed on, written on or otherwise affixed to
them a legend substantially in the following form:
Until the Separation Time (as defined in the Rights Agreement referred to below),
this also evidences and entitles the holder hereof to certain Rights as set forth in a
Rights Agreement, dated as of July 24, 2016 (as such may be amended from time
to time, the “Rights Agreement”), between TerraForm Power, Inc. (the
“Company”) and Computershare Trust Company, N.A., as Rights Agent (or any
successor Rights Agent), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may become exercisable for securities or assets of
the Company or securities of another entity, may be exchanged for shares of Class
A Common Stock or other securities or assets of the Company, may expire, may
become null and void (including if they are “Beneficially Owned” by an
-23-
“Acquiring Person” or an Affiliate or Associate thereof, as such terms are defined
in the Rights Agreement, or by any transferee of any of the foregoing) or may be
evidenced by separate certificates and may no longer be evidenced hereby. The
Company will mail or arrange for the mailing of a copy of the Rights Agreement
to the holder hereof without charge after the receipt of a written request therefor.
Certificates representing shares of Class A Common Stock that are issued and
outstanding at the Record Time (or confirmation of the registration of the Class A
Common Stock on the stock transfer books with respect to uncertificated shares),
together with the letter mailed pursuant to Section 2.1, shall evidence one Right for each
share of Class A Common Stock evidenced thereby notwithstanding the absence of the
foregoing legend.
The Company shall mail or arrange for the mailing of a copy of this
Agreement to any Person that holds Class A Common Stock, as evidenced by the
registration of the Class A Common Stock in the name of such Person on the stock
transfer books of the Company, without charge after the receipt of a written request
therefor.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will entitle the
holder thereof, at or after the Separation Time and prior to the Expiration Time, to
purchase, for the Exercise Price, one one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share of Class A
Common Stock (or, if the Class A Common Stock shall be uncertificated, by the
registration of the associated Class A Common Stock on the stock transfer books of the
-24-
Company and any confirmation thereof provided for in Section 2.2), together, in the case
of shares acquired prior to the Record Time, with the letter mailed to the record holder
thereof pursuant to Section 2.1, and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter or confirmation) of, such
associated share.
(c) Subject to the terms and conditions hereof, at or after the
Separation Time and prior to the Expiration Time, (i) the Rights may be exercised
pursuant to Section 2.3(d) below, (ii) the Rights will be transferred independent of shares
of Class A Common Stock and (iii) the Rights Agent will promptly, at the Company’s
expense, if requested by the Company and provided with all necessary documentation
and information (in the reasonable discretion of the Rights Agent), mail to each holder of
record of Class A Common Stock (provided that the exchange of all of the then
outstanding Rights has not occurred pursuant to Section 3.1(c)) as of the Separation Time
(other than any Person whose Rights have become null and void pursuant to Section
3.1(b)), at such holder’s address as shown by the records of the Company (the Company
hereby agreeing to furnish copies of such records to the Rights Agent for this purpose) or
the transfer agent or registrar for the Class A Common Stock, (x) a certificate (a “Rights
Certificate”) in substantially the form of Exhibit A hereto appropriately completed,
representing the number of Rights held by such holder at the Separation Time and having
such marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement and as do not affect the rights, liabilities, responsibilities
-25-
or duties of the Rights Agent, or as may be required to comply with any law, rule or
regulation or with any rule or regulation of any national securities exchange or quotation
system on which the Rights may from time to time be listed or traded (“Trading
Regulation”), or to conform to usage, and (y) a disclosure statement describing the
Rights. Receipt of a Rights Certificate by any Person shall not preclude a later
determination that such Rights are null and void pursuant to Section 3.1(b). The
Company may implement such procedures as it deems appropriate, in its sole discretion,
to minimize the possibility that Rights are received by Persons with respect to whom
Rights would be null and void under Section 3.1(b).
(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day at or after the Separation Time and prior to the Expiration
Time by submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an “Election to Exercise”) substantially in the form attached
to the Rights Certificate duly executed and properly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the order of the
Company, of a sum equal to the Exercise Price multiplied by the number of Rights being
exercised and a sum sufficient to cover any tax or charge that may be payable in respect
of any transfer involved in the transfer or delivery of Rights Certificates or the issuance
or delivery of certificates (or, if uncertificated, the registration on the stock transfer books
of the Company) for shares or depositary receipts (or both) in a name other than that of
the holder of the Rights being exercised.
-26-
(e) Upon receipt of a Rights Certificate, with a properly completed
and duly executed Election to Exercise accompanied by payment as set forth in
Section 2.3(d), and subject to the terms and conditions hereof, the Rights Agent will
thereupon promptly (i)(A) requisition from a transfer agent stock certificates evidencing
such number of shares or other securities to be purchased or, in the case of uncertificated
shares or other securities, requisition from a transfer agent a notice setting forth such
number of shares or other securities to be purchased for which registration will be made
on the stock transfer books of the Company (the Company hereby irrevocably authorizing
its transfer agents to comply with all such requisitions), and (B) if the Company elects
pursuant to Section 5.5 not to issue certificates (or effect registrations on the stock
transfer books of the Company) representing fractional shares, requisition from the
depositary selected by the Company depositary receipts representing the fractional shares
to be purchased (the Company hereby irrevocably authorizes each such depositary agent
to comply with such requisitions) or, when necessary to comply with this Agreement,
requisition from the Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates, depositary receipts,
notices and/or, when necessary to comply with this Rights Agreement, cash, cause the
same to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of certificates, depositary receipts or notices) in such
name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all of the
Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing
-27-
the Rights remaining unexercised will be issued by the Rights Agent to such holder or to
such holder’s duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered (or evidenced by
registration on the stock transfer books of the Company) upon exercise of Rights shall, at
the time of delivery of the certificates (or registration) for such shares (subject to payment
of the Exercise Price), be duly and validly authorized, executed, issued and delivered (or
registered) and fully paid and nonassessable; (ii) take all such action as may be necessary
to comply with any applicable requirements of the Securities Act of 1933, as amended
from time to time, or the Exchange Act, and the rules and regulations thereunder, and any
other applicable law, rule or regulation, in connection with the issuance of any shares
upon exercise of Rights; and (iii) pay when due and payable any and all federal and state
taxes and charges that may be payable in respect of the original issuance or delivery of
the Rights Certificates or of any shares issued upon the exercise of Rights, provided, that
the Company shall not be required to pay any tax or charge that may be payable in
respect of any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates (or the registration) for shares in a name other than
that of the holder of the Rights being transferred or exercised.
(h) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any action with
respect to the exercise or assignment of a Rights Certificate unless the registered holder
of such Rights Certificate shall have (i) properly completed and duly signed the
-28-
certificate following the form of assignment or the form of election to exercise, as
applicable, set forth on the reverse side of the Rights Certificate surrendered for such
exercise or assignment, (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced
thereby, and the Affiliates and Associates of such Beneficial Owner or former Beneficial
Owner, as the Company or the Rights Agent may reasonably request and (iii) paid a sum
sufficient to cover any tax or charge that may be imposed as required under Section
2.3(d).
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation Time
(i) declare or pay a dividend on Class A Common Stock payable in Class A Common
Stock, (ii) subdivide the outstanding Class A Common Stock or (iii) combine the
outstanding Class A Common Stock into a smaller number of shares of Class A Common
Stock, (x) the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of shares of
Class A Common Stock including any fractional shares in lieu of which such holder
received cash (the “Expansion Factor”) that a holder of one share of Class A Common
Stock immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment will become
that number of Rights equal to the Expansion Factor, and the adjusted number of Rights
will be deemed to be distributed among the shares of Class A Common Stock with
respect to which the original Rights were associated (if they remain outstanding) and the
-29-
shares issued in respect of such dividend, subdivision or combination, so that each such
share of Class A Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or effective
date for the applicable dividend, subdivision or combination.
In the event that the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Class A Common Stock otherwise than
in a transaction referenced in the preceding paragraph, each such share of Class A
Common Stock so issued shall automatically have one new Right associated with it,
which Right shall be evidenced by the certificate representing such share (or, if the Class
A Common Stock shall be uncertificated, such Right shall be evidenced by the
registration of such Class A Common Stock on the stock transfer books of the Company
and the confirmation thereof provided for in Section 2.2). Rights shall be issued by the
Company in respect of shares of Class A Common Stock that are issued or sold by the
Company after the Separation Time only to the extent provided in Section 5.3.
(b) In the event that the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Class A Common Stock (other than pursuant to
any non-extraordinary periodic cash dividend or a dividend paid solely in Class A
Common Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or statutory share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise Price,
number of Rights and/or securities or other property purchasable upon exercise of Rights
-30-
as the Board of Directors, in its sole discretion, may deem to be appropriate under the
circumstances, and the Company and the Rights Agent shall amend this Agreement as
necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment and (ii) promptly file with the Rights Agent and with
each transfer agent for the Class A Common Stock a copy of such certificate. The Rights
Agent shall be fully protected in relying on any such certificate and on any adjustment or
statement therein contained and shall have no duty or liability with respect to, and shall
not be deemed to have knowledge of, any adjustment or any such event unless and until it
shall have received such a certificate.
(d) Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though such
certificates may continue to express the securities purchasable at the time of issuance of
the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each Person in whose name
any certificate for shares is issued (or registration on the stock transfer books is effected)
upon the exercise of Rights shall for all purposes be deemed to have become the holder of
record of the shares represented thereby at the Close of Business on the Business Day
-31-
upon which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price for such Rights (and any applicable taxes and other
charges payable by the exercising holder hereunder) was made; provided, however, that if
the date of such surrender and payment is a date upon which the stock transfer books of
the Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate (or registration) shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman and Interim CEO, Chief Financial Officer, General Counsel, any Vice
President, Treasurer, Secretary or any such other officer of the Company as may be
designated by the Chairman and Interim CEO, the Chief Financial Officer or any Vice
President. The signature of any of these officers on the Rights Certificates may be
manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such Rights Certificates.
Promptly after the Separation Time, unless the exchange pursuant to
Section 3.1(c) shall have occurred, the Company will notify the Rights Agent in writing
of such Separation Time (and if such notification is given orally, the Company shall
confirm the same in writing on or prior to the Business Day next following) and will
-32-
deliver Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Sections 2.3(c) and 3.1(b), the Rights Agent shall
manually or by facsimile countersign and deliver such Rights Certificates to the holders
of the Rights pursuant to Section 2.3(c). Until the written notice provided for in this
Section 2.6 is received by the Rights Agent, the Rights Agent may presume conclusively
for all purposes that the Separation Time has not occurred. No Rights Certificate shall be
valid for any purpose unless manually or by facsimile countersigned by the Rights Agent.
In case any authorized signatory of the Rights Agent who has
countersigned any of the Rights Certificates ceases to be an authorized signatory of the
Rights Agent before issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be issued and delivered by the Company with the same force and effect
as though the person who countersigned such Rights Certificates had not ceased to be an
authorized signatory of the Rights Agent; and any Rights Certificates may be
countersigned on behalf of the Rights Agent by any person who, at the actual date of the
countersignature of such Rights Certificate, is properly authorized to countersign such
Rights Certificate, although at the date of the execution of this Agreement any such
person was not so authorized.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the “Rights Register”) in
which, subject to such reasonable regulations as it may prescribe, the Company will
-33-
provide for the registration and transfer of Rights. The Rights Agent is hereby appointed
“Rights Registrar” for the purpose of maintaining the Rights Register for the Company
and registering Rights and transfers of Rights after the Separation Time as herein
provided. In the event that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register at all reasonable times
after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate, and subject to
the provisions of Sections 2.7(c) and (d), the Company will execute, and the Rights
Agent will countersign and, if requested by the Company and provided with all necessary
information, deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder’s instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be the valid
obligations of the Company, and such Rights shall be entitled to the same benefits under
this Agreement as the Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder’s attorney duly authorized in writing. As a
-34-
condition to the issuance of any new Rights Certificate under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or other charge
that may be imposed in relation thereto.
(d) The Company shall not register the transfer or exchange of any
Rights that have become null and void under Section 3.1(b), been exchanged under
Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration
Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the destruction, loss or
theft of any Rights Certificate and (ii) such security or indemnity as may be required by
them to save each of them and any of their agents harmless, then, subject to Sections
3.1(b), 3.1(c) and 5.1 and in the absence of written notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Rights Agent shall countersign
and, if requested by the Company and provided with all necessary information, deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or
stolen.
-35-
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to cover any
tax or other charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) connected therewith. The Rights
Agent shall have no duty or obligation to take any action under any Section of this
Agreement which requires the payment by a Rights holder of applicable taxes and/or
charges unless and until it is satisfied that all such taxes and/or charges have been paid.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the destroyed, lost or
stolen Rights Certificate shall be at any time enforceable by anyone, and, subject to
Section 3.1(b) shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Class A Common Stock
certificate or confirmation of registration, if uncertificated), the Company, the Rights
Agent and any agent of the Company or the Rights Agent may deem and treat the Person
in whose name such Rights Certificate (or, prior to the Separation Time, such Class A
Common Stock certificate or confirmation, if uncertificated) is registered as the absolute
owner thereof and of the Rights evidenced thereby for all purposes whatsoever, including
the payment of the Redemption Price, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in this Agreement, unless the
-36-
context otherwise requires, the term “holder” of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated shares of Class A
Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if surrendered
to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any
case, shall be promptly cancelled by the Rights Agent. The Company may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
by the Rights Agent. No Rights Certificates shall be countersigned in lieu of or in
exchange for any Rights Certificates cancelled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all cancelled
Rights Certificates and deliver a certificate of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of Class A
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
-37-
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Class A Common Stock certificate or Class A Common
Stock registration, if uncertificated) for registration of transfer, the Company, the Rights
Agent and any agent of the Company or the Rights Agent may deem and treat the Person
in whose name the Rights Certificate (or, prior to the Separation Time, the associated
Class A Common Stock certificate or Class A Common Stock registration, if
uncertificated) is registered as the absolute owner thereof and of the Rights evidenced
thereby for all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become null and void;
(e) this Agreement may be supplemented or amended from time to
time in accordance with its terms;
(f) the Board of Directors shall have the exclusive power and
authority delegated to it pursuant to Section 5.13; and
(g) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a Right or
other Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or executive order
-38-
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, except as otherwise provided in this Section 3.1, each Right shall
constitute the right to purchase from the Company, upon exercise thereof in accordance
with the terms hereof (but subject to Section 5.10), that number of shares of Class A
Common Stock having an aggregate Market Price on the Stock Acquisition Date that
gave rise to the Flip-in Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or after such Stock
Acquisition Date any of the events described in Section 2.4(a) or (b), or any analogous
event, shall have occurred with respect to the Class A Common Stock).
(b) Notwithstanding the foregoing, any Rights that are Beneficially
Owned on or after the Stock Acquisition Date by an Acquiring Person or an Affiliate or
Associate thereof shall become null and void and any holder of such Rights (including
transferees, whether direct or indirect, of any such Persons) shall thereafter have no right
to exercise or transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting the same
will not properly complete the certification set forth at the end of the form of assignment
or notice of election to exercise or, if requested, will not provide such additional
-39-
evidence, including, without limitation, the identity of the Beneficial Owners and their
Affiliates and Associates (or former Beneficial Owners and their Affiliates and
Associates) as the Company or the Board of Directors shall reasonably request in order to
determine if such Rights are null and void, then the Company shall be entitled
conclusively to deem the Rights to be Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or a transferee of any of the foregoing and accordingly
deem the Rights evidenced thereby to be null and void and not transferable, exercisable
or exchangeable.
(c) Unless the Board of Directors determines, with the prior written
approval of holders of a majority of the shares of Class B Common Stock, prior to the
making of the public announcement contemplated by the definition of Stock Acquisition
Date, not to effect the exchange of Rights as follows, and provided that the Acquiring
Person is not the Beneficial Owner of more than 50% of the outstanding shares of Class
A Common Stock, excluding for this purpose any shares determined to be Constructively
Owned, all (but not less than all) of the then outstanding Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section 3.1(b)) shall,
without any further required action by the Board of Directors, be exchanged for shares of
Class A Common Stock at an exchange ratio of one share of Class A Common Stock per
Right, appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Separation Time any of the events described in
Section 2.4(a) or (b), or any analogous event, shall have occurred with respect to the
-40-
Class A Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the “Exchange Ratio”).
Unless the Board of Directors determines, with the prior written approval
of holders of a majority of the shares of Class B Common Stock, as set forth above not to
effect the exchange of Rights, immediately upon the public announcement contemplated
by the definition of Stock Acquisition Date (the “Exchange Time”), without any further
action and without any notice, the right to exercise the Rights will terminate and each
Right (other than Rights that have become null and void pursuant to Section 3.1(b)),
whether or not an Election to Exercise has been previously delivered, will thereafter
represent only the right to receive a number of shares of Class A Common Stock equal to
the Exchange Ratio. The exchange of the Rights by the Board of Directors may be made
effective on such basis and with such conditions as the Board of Directors in its sole
discretion may further establish. Promptly after the Exchange Time, the Company shall
give written notice thereof (specifying the steps to be taken to receive shares of Class A
Common Stock in exchange for Rights) to the Rights Agent and the holders of the Rights
(other than Rights that have become null and void pursuant to Section 3.1(b)) outstanding
immediately prior thereto by mailing such notice in accordance with Section 5.9. In
connection with effecting an exchange pursuant to this Section 3.1(c), the Board of
Directors may direct the Company to enter into a Trust Agreement in such form and with
such terms as the Board of Directors shall then approve (the “Trust Agreement”). If the
Board of Directors so directs, the Company shall enter into the Trust Agreement and shall
issue to the trust created by such agreement (the “Trust”) all or some (as designated by
-41-
the Board of Directors) of the shares of Class A Common Stock (or other securities)
issuable pursuant to the exchange, and all or some (as designated by the Board of
Directors) holders of Rights entitled to receive shares pursuant to the exchange shall be
entitled to receive such shares (and any dividends paid or distributions made thereon after
the date on which such shares are deposited in the Trust) only from the Trust and solely
upon compliance with the relevant terms and provisions of the Trust Agreement. Prior to
effecting an exchange and registering shares of Class A Common Stock (or other such
securities) in any Person’s name, including any nominee or transferee of a Person, the
Company may require (or cause the trustee of the Trust to require), as a condition thereof,
that any holder of Rights provide evidence, including, without limitation, the identity of
the Beneficial Owners thereof and their Affiliates and Associates (or former Beneficial
Owners thereof and their Affiliates and Associates) as the Company shall reasonably
request in order to determine if such Rights are null and void. If any Person shall fail to
comply with such request, the Company shall be entitled conclusively to deem the Rights
formerly held by such Person to be null and void pursuant to Section 3.1(b) and not
transferable or exercisable or exchangeable in connection herewith. Any shares of Class
A Common Stock or other securities issued at the direction of the Board of Directors in
connection herewith shall be validly issued, fully paid and nonassessable shares of Class
A Common Stock or of such other securities (as the case may be), and the Company shall
be deemed to have received as consideration for such issuance a benefit having a value
that is at least equal to the aggregate par value of the shares so issued. The determination
by the Board of Directors not to exercise its election not to effect the exchange of the
-42-
Rights shall constitute a determination by the Board of Directors that such consideration
is adequate.
Each Person in whose name any certificate for shares is issued (or for
whom any registration on the stock transfer books of the Company is made) upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for all purposes
be deemed to have become the holder of record of the shares represented thereby on, and
such certificate (or registration on the stock transfer books of the Company) shall be
dated (or registered as of), the date upon which the Rights Certificate evidencing such
Rights was duly exchanged or deemed exchanged by the Company) and payment of any
applicable taxes and other governmental charges payable by the holder was made;
provided, however, that if the date of such exchange and payment is a date upon which
the stock transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate (or registration on the
stock transfer books of the Company) shall be dated (or registered as of), the next
succeeding Business Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a)
or (c) to issue shares of Class A Common Stock upon exercise of or in exchange for
Rights, the Company, as determined by the Board of Directors, may substitute therefor
shares of Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Class A Common Stock so issuable, subject to adjustment.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Class A Common Stock or Preferred Stock of the
-43-
Company to permit the exercise in full of the Rights in accordance with Section 3.1(a) or
if the Company so elects to make the exchange referenced in Section 3.1(c), to permit the
issuance of all shares pursuant to the exchange, the Company shall either (i) call a
meeting of stockholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take the
action specified in clause (ii) of this sentence) or (ii) take such action as shall be
necessary to ensure and provide, without exposing the directors to personal liability (as
determined by the Board of Directors), as and when and to the maximum extent
permitted by applicable law and any agreements or instruments in effect prior to the time
an Acquiring Person controls the Board of Directors (and remaining in effect) to which
the Company is a party, that each Right shall thereafter constitute the right to receive,
(x) in the case of any exercise in accordance with Section 3.1(a), at the Company’s
option, either (A) in return for the Exercise Price, debt or equity securities or other assets
(or a combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as may be required for the valid issuance of
securities or otherwise required by applicable law), debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the Exercise Price, or (y) in
the case of an exchange of Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having a fair value equal to the
product of the Market Price of a share of Class A Common Stock on the Flip-in Date
times the Exchange Ratio in effect on the Flip-in Date, where in any case set forth in (x)
or (y) above the fair value of such debt or equity securities or other assets shall be as
-44-
determined in good faith by the Board of Directors, after consultation with a nationally
recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall
not enter into any agreement with respect to, consummate or permit to occur any Flip-
over Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-over Entity, for the benefit of the holders of the Rights (the terms
of which shall be reflected in an amendment to this Agreement entered into with the
Rights Agent), providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to purchase from
the Flip-over Entity, upon exercise thereof in accordance with the terms hereof, that
number of shares of Flip-over Stock of the Flip-over Entity having an aggregate Market
Price on the date of consummation or occurrence of such Flip-over Transaction or Event
equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in order to protect the interests of the holders of Rights
generally in the event that after such date of consummation or occurrence any of the
events described in Section 2.4(a) or (b), or any analogous event, shall have occurred
with respect to the Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable
for, and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company pursuant to this
Agreement.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 pursuant to an agreement entered into by the Company prior to a
-45-
Flip-in Date, the Company shall not enter into any agreement with respect to,
consummate or permit to occur any Flip-over Transaction or Event if (i) at the time
thereof there are any rights, warrants or securities outstanding or any other arrangements,
agreements or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction, (ii) prior to, simultaneously with or
immediately after such Flip-over Transaction or Event, the stockholders of the Person
who constitutes, or would constitute, the Flip-over Entity shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates or
Associates, or (iii) the form or nature of organization of the Flip-over Entity would
preclude or limit the exercisability of the Rights.
(c) The provisions of this Section 3.2 shall apply to successive Flip-
over Transactions or Events.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to
act as agent for the Company in accordance with the express terms and conditions hereof
(and no implied terms or conditions), and the Rights Agent hereby accepts such
appointment. The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of the Rights
Agent, to reimburse its reasonable expenses, counsel fees and disbursements and other
disbursements incurred in the preparation, negotiation, delivery, amendment,
-46-
administration and execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also covenants and agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense (including, without limitation, the
reasonable fees and expenses of legal counsel), that may be paid, incurred or suffered by
it without gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (each as determined by a final, non-appealable, judgment of a court of competent
jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent
arising from or out of, directly or indirectly, any claims or liability resulting from its
actions as Rights Agent pursuant to this Agreement or in connection with the acceptance,
administration, exercise and performance of its duties under this Agreement, including
the costs and expenses of defending against any claim of liability arising therefrom,
directly or indirectly, or enforcing its rights hereunder. The costs and expenses incurred
in enforcing this right of indemnification shall be paid by the Company. The provisions
of this Section 4.1 and Section 4.3 below shall survive the termination of this Agreement,
the exercise or expiration of the Rights and the resignation, replacement or removal of the
Rights Agent.
(b) The Rights Agent shall be authorized and protected and shall incur
no liability for or in respect of any action taken, suffered or omitted to be taken by it in
connection with its acceptance and administration of this Agreement or the exercise and
performance of its duties hereunder in reliance upon any certificate for securities (or
registration on the stock transfer books of the Company) purchasable upon exercise of
-47-
Rights, Rights Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or upon any written instructions or statements from the Company with
respect to any matter relating to its acting as Rights Agent hereunder without further
inquiry or examination on its part, or otherwise upon the advice of counsel as set forth
herein. The Rights Agent shall not be deemed to have knowledge of any event of which
it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully
protected and shall incur no liability for failing to take any action in connection
therewith, unless and until it has received such notice in writing.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a party, or any
Person succeeding to the shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such successor Rights Agent
-48-
may adopt the countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates will have the full
force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and in this
Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes to perform
only the duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations) upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel selected by it
(who may be legal counsel for the Rights Agent or the Company or an employee of the
Rights Agent), and the advice or opinion of such counsel will be full and complete
-49-
authorization and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted to be taken by it in the
absence of bad faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or matter (including
without limitation, the identity of an Acquiring Person and the determination of the
current per share market price of any security) be proved or established by the Company
prior to taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman and Interim CEO, the Chief Financial
Officer, the General Counsel, any Vice President, the Treasurer, the Secretary or such
other officer of the Company as may be designated by the Chairman and Interim CEO,
the Chief Financial Officer or any Vice President of the Company and delivered to the
Rights Agent; and such certificate will be full and complete authorization and protection
to the Rights Agent and the Rights Agent shall incur no liability for any action taken,
suffered or omitted to be taken in the absence of bad faith by it under the provisions of
this Agreement in reliance upon such certificate. The Rights Agent shall have no duty to
act without such a certificate signed by an officer of the Company as set forth in the
preceding sentence.
(c) The Rights Agent will be liable to the Company and any other
Person hereunder only for its own gross negligence, bad faith or willful misconduct (each
-50-
as determined by a final, non-appealable, judgment of a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for
special, punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including, but not limited to, lost profits) under any provision of this
Agreement, even if the Rights Agent has been advised of or has foreseen the possibility
or likelihood of such loss or damage. Any and all liability of the Rights Agent under this
Agreement will be limited to the amount of annual fees paid by the Company to the
Rights Agent during the twelve (12) months immediately preceding the event for which
recovery from the Rights Agent is being sought.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the certificates, if any, for
securities purchasable upon exercise of Rights or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such statements and
recitals are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not have any liability for nor be under any
responsibility in respect of the legality or validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate, if any, for securities
purchasable upon exercise of Rights or Rights Certificate (except its countersignature
thereof) or any modification or order of any court, tribunal or governmental authority in
connection with the foregoing; nor will it be liable or responsible for any breach by the
Company of any covenant or failure by the Company to satisfy any condition contained
-51-
in this Agreement or in any Rights Certificate; nor will it be liable or responsible for any
change in the exercisability or exchangeability of the Rights (including the Rights
becoming null and void pursuant to Section 3.1(b)) or any change or adjustment in the
terms of the Rights (including any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2) or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights after receipt by the Rights Agent
of the certificate contemplated by Section 2.4 describing any such adjustment, upon
which the Rights Agent may rely); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any securities
purchasable upon exercise of Rights or any Rights or as to whether any securities
purchasable upon exercise of Rights will, when issued, be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required or
requested by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement, in the reasonable discretion of the Rights Agent.
(g) The Rights Agent is hereby authorized and directed to accept
advice or written instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman and Interim CEO, the Chief
Financial Officer, the General Counsel, any Vice President, the Treasurer, the Secretary
-52-
or any such other officer of the Company as may be designated by the Chairman and
Interim CEO, the Chief Financial Officer or any Vice President, and to apply to such
persons for advice or instructions in connection with its duties, and such advice or
instructions shall be full authorization and protection to the Rights Agent and the Rights
Agent shall not be liable for or in respect of any action taken, suffered or omitted to be
taken by it in the absence of bad faith in accordance with instruction of any such person
or for any delay while acting or while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent instructions
received by any such person. In the event the Rights Agent believes any ambiguity or
uncertainty exists hereunder or in any notice, instruction, direction, request or other
communication, paper or document received by the Rights Agent hereunder, the Rights
Agent may, in its sole discretion, refrain from taking any action, and shall be fully
protected and shall not be liable in any way to the Company or any other Person for
refraining from taking such action, if the Rights Agent shall have notified the Company
promptly of such belief in writing, and unless the Rights Agent shall receive written
instructions executed by a person authorized under this Section 4.3(g), which eliminates
such ambiguity or uncertainty to the satisfaction of the Rights Agent .
(h) The Rights Agent and any stockholder, member, affiliate, director,
officer, employee, agent or representative of the Rights Agent may buy, sell or deal in
Class A Common Stock, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as
-53-
though it were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent or any such stockholder, member, affiliate, director, officer, employee,
agent or representative from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself (through directors,
officers or employees) or by or through its attorneys or agents, and the Rights Agent will
not be answerable or accountable for any act, omission, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any other Person resulting
from any such act, omission, default, neglect or misconduct, absent gross negligence, bad
faith or willful misconduct in the selection and continued employment thereof (each as
determined by a final, non-appealable, judgment of a court of competent jurisdiction).
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if it believes that repayment
of such funds or adequate indemnification against such risk or liability is not assured to it.
The Rights Agent shall not be required to take any action or to follow any instruction of
the Company that the Rights Agent has been advised of in writing by outside counsel
would cause the Rights Agent to take action that is illegal.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has not been properly completed or duly
-54-
executed, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company; provided,
however that the Rights Agent shall not be liable for any delays arising from the duties
under this Section 4.3(k).
(l) The Rights Agent shall have no responsibility to the Company, any
holders of Rights or any holders of shares of Common Stock for interest or earnings on
any moneys held by the Rights Agent pursuant to this Agreement.
(m) The Rights Agent shall not be required to take notice or be deemed
to have notice of any event or condition hereunder, including any event or condition that
may require action by the Rights Agent, unless the Rights Agent shall be specifically
notified in writing of such event or condition by the Company, and all notices or other
instruments required by this Agreement to be delivered to the Rights Agent must, in order
to be effective, be received by the Rights Agent as specified in Section 5.9 hereof, and in
the absence of such notice so delivered, the Rights Agent may conclusively assume no
such event or condition exists.
(n) Notwithstanding anything to the contrary contained herein, the
Rights Agent shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of
computer facilities, or loss of data due to power failures or mechanical difficulties with
information storage or retrieval systems, labor difficulties, war, or civil unrest.
-55-
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon at least 30 days’ notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company by
registered or certified mail or nationally recognized overnight courier and, in the event
that the Rights Agent or one of its affiliates is not also the transfer agent of the Company,
to each transfer agent of Common Stock known to the Rights Agent. In the event the
transfer agency relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to have resigned automatically and be
discharged from its duties as Rights Agent under this Agreement as of the effective date
of such termination, and the Company shall be responsible for sending any required
notice hereunder. The Company may remove the Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent and to each transfer agent of the Class A Common
Stock and to the holders of the Rights in accordance with Section 5.9. If the Rights
Agent should resign or be removed or otherwise become incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails to make
such appointment within a period of 30 days after such removal or the effectiveness of
such resignation or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder’s Rights Certificate for inspection by
the Company), then the incumbent Rights Agent or any registered holder of any Rights
may apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
-56-
court, shall be (a) a Person (other than a natural person) organized and doing business
under the laws of the United States or any state of the United States, in good standing,
which is authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by federal
or state authority and which, when combined with its affiliates, has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate of a Person described in clause (a) of this sentence. After appointment,
the successor Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the foregoing purpose, but the
predecessor Rights Agent shall not be required to make any additional expenditure or
assume any additional liability in connection with the foregoing. Not later than the
effective date of any such appointment, the Company will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Class A Common Stock,
and mail a notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
-57-
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors may, at its option, at any
time prior to the Flip-in Date, elect to redeem all (but not less than all) the then
outstanding Rights at the Redemption Price and the Company, at its option, may pay the
Redemption Price either in cash or shares of Class A Common Stock or other securities
of the Company deemed by the Board of Directors, in the exercise of its sole discretion,
to be at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors electing to
redeem the Rights (or, if the resolution of the Board of Directors electing to redeem the
Rights states that the redemption will not be effective until the occurrence of a specified
future time or event, upon the occurrence of such future time or event), without any
further action and without any notice, the right to exercise the Rights will terminate and
each Right, whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board of
Directors. Promptly after the Rights are redeemed, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice in accordance with Section 5.9.
(c) A committee of the independent members of the Board of
Directors will evaluate this Agreement annually to determine whether it continues to be
in the best interests of the Company’s stockholders.
-58-
(d) If the Company, not earlier than 40 Business Days nor later than
80 Business Days following the commencement of a Qualified Offer within the meaning
of Rule 14d-2(a) under the Exchange Act, which has not been terminated prior thereto
and which continues to be a Qualified Offer, receives a written notice complying with the
terms of this Section 5.1(d) (the “Special Meeting Notice”) that is properly executed by
the holders of record (or their duly authorized proxy) of at least ten percent (10%) of the
shares of Class A Common Stock of the Company or of the voting power of the shares of
Common Stock of the Company, in each case, then outstanding (other than shares of
Class A Common Stock held by the offeror or its Affiliates and Associates) directing the
Board of Directors to submit to a vote of stockholders at a special meeting of the
stockholders of the Company (a “Special Meeting”) a resolution authorizing the
redemption of all, but not less than all, of the then outstanding Rights at the Redemption
Price (the “Redemption Resolution”), then the Board of Directors shall take such actions
as are necessary or desirable to cause the Redemption Resolution to be so submitted to a
vote of stockholders by including a proposal relating to adoption of the Redemption
Resolution in the proxy materials of the Company for the Special Meeting; provided,
however, that in any twelve-month period the Company shall not be required to submit
more than one Redemption Resolution to a vote of stockholders with respect to Qualified
Offers from any given potential Acquiring Person (including any Affiliates or
Associates). For purposes of a Special Meeting Notice, the record date for determining
eligible holders of record shall be the 60th Business Day following the commencement of
a Qualified Offer within the meaning of Rule 14d-2(a) under the Exchange Act. Any
-59-
Special Meeting Notice must be delivered to the Secretary of the Company at the
principal executive offices of the Company and must set forth as to the stockholders of
record executing the request (i) the name and address of such stockholders, as they
appear on the Company’s books and records, (ii) the class and number of shares of Class
A Common Stock of the Company that are owned of record by each of such stockholders,
and (iii) in the case of Class A Common Stock Beneficially Owned by another Person, an
executed certification by the holder of record that such holder has executed such Special
Meeting Notice only after obtaining instructions to do so from such Beneficial Owner.
The Board of Directors shall set a date for determining the stockholders of record entitled
to notice of and to vote at the Special Meeting in accordance with the Company’s
certificate of incorporation, bylaws and applicable law. Subject to the requirements of
applicable law, the Board of Directors may take a position in favor of or opposed to the
adoption of the Redemption Resolution, or no position with respect to the Redemption
Resolution, as it determines to be appropriate in the exercise of its duties. At the
offeror’s request, the Company shall include in any proxy soliciting material prepared by
it in connection with the Special Meeting proxy soliciting material submitted by the
offeror; provided, however, that the offeror, by written agreement with the Company
contained in or delivered with such request, shall have indemnified the Company against
any and all liabilities resulting from any statements found to be defamatory,
misstatements, misleading statements or omissions contained in or omitted from the
offeror’s proxy soliciting materials and have agreed to pay the Company’s incremental
costs incurred as a result of including such material in the Company’s proxy soliciting
-60-
material. Notwithstanding anything to the contrary contained in this Agreement, if the
Board of Directors determines that it is in the best interests of stockholders to seek an
alternative transaction so as to obtain greater value for stockholders than that provided by
any Qualified Offer, the Company shall be entitled to include information relating to such
alternative transaction in the proxy soliciting material prepared by it in connection with
the Special Meeting. If no Person has become an Acquiring Person prior to the
redemption date referred to in this Section 5.1(d), and the Qualified Offer continues to be
a Qualified Offer and either (A) the Special Meeting is not held on or prior to the 90th
Business Day following receipt of the Special Meeting Notice (other than in the event
such Special Meeting is not held because of the absence of a quorum due to the failure of
SunEdison to be present or represented at such Special Meeting), or (B) at the Special
Meeting, the holders of at least a majority of the voting power of the shares of Common
Stock and a majority of the shares of Class A Common Stock, in each case, outstanding
and entitled to vote as of the record date for the Special Meeting, not giving effect to any
affirmative votes cast by the offeror or any of its Affiliates or Associates, shall vote in
favor of the Redemption Resolution (and the results of the vote are certified as official by
the appointed inspectors of election for the Special Meeting), then all of the Rights shall
be deemed redeemed by such failure to hold the Special Meeting or as a result of such
stockholder action, as the case may be, at the Redemption Price, or the Board of Directors
shall take such other action as would prevent the existence of the Rights from interfering
with the consummation of the Qualified Offer, effective immediately prior to the
consummation of the Qualified Offer, if, and only if, the Qualified Offer is consummated
-61-
within 60 days after either (x) the Close of Business on the 90th Business Day following
receipt of the Special Meeting Notice if a Special Meeting is not held on or prior to such
date or (y) the date on which the results of the vote on the Redemption Resolution at the
Special Meeting are certified as official by the appointed inspectors of election for the
Special Meeting, as the case may be. Nothing in this subparagraph (d) shall be construed
as limiting or prohibiting the Company or any offeror from proposing or engaging in any
acquisition, disposition or other transfer of any securities of the Company, any merger or
consolidation involving the Company, any sale or other transfer of assets of the
Company, any liquidation, dissolution or winding-up of the Company, or any other
business combination or other transaction, or any other action by the Company or such
offeror; provided, however, that the holders of Rights shall have the rights set forth in this
Agreement with respect to any such acquisition, disposition, transfer, merger,
consolidation, sale, liquidation, dissolution, winding-up, business combination,
transaction or action.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement or any
Right after the Expiration Time, except as set forth in Section 4.1 or as otherwise
expressly set forth in this Agreement, or, if the Rights have been exchanged or redeemed,
as provided in Section 3.1 or 5.1, respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be approved
-62-
by its Board of Directors to reflect any adjustment or change in the number or kind or
class of shares of stock purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of
shares of Class A Common Stock by the Company following the Separation Time and
prior to the Expiration Time pursuant to the terms of securities convertible, exchangeable
or redeemable into shares of Class A Common Stock (including, for the avoidance of
doubt, the issuance of Class A Common Stock following the Separation Time and prior
to the Expiration Time upon the exchange of any Class B Units of Terra LLC, together
with the corresponding shares of Class B Common Stock, issued prior to and outstanding
at the Separation Time for shares of Class A Common Stock in accordance with the
Company’s certificate of incorporation and bylaws and the limited liability company
agreement of Terra LLC then in effect) or to options, warrants or other rights (other than
any securities issued or issuable in connection with the exercise or exchange of Rights),
in each case issued or granted prior to, and outstanding at, the Separation Time, the
Company shall issue to the holders of such shares of Class A Common Stock, Rights
Certificates representing the appropriate number of Rights in connection with the
issuance or sale of such shares of Class A Common Stock; provided, however, in each
case, (i) no such Rights Certificate shall be issued, if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued if, and to the
extent that, appropriate adjustment shall have otherwise been made in lieu of the issuance
-63-
thereof (it being specified, for the avoidance of doubt, that no such Rights Certificates
shall be issued in connection with the issuance of Class A Common Stock upon the
exchange of any Class B Unit of Terra LLC, together with the corresponding share of
Class B Common Stock, for shares of Class A Common Stock in accordance with the
Company’s certificate of incorporation and bylaws and the limited liability company
agreement of Terra LLC then in effect, if any fraction of any Class B Unit of Terra LLC
and corresponding share of Class B Common Stock (or Series B Preferred Stock, as
defined in the limited liability company agreement of Terra LLC) has been or will be
issued to the holder of such Class B Unit pursuant to the equitable adjustment mechanism
set forth in Section 4.1(e) of the limited liability agreement of Terra LLC, as amended on
the date hereof, or if the holder of such Class B Unit has or will benefited from any other
equitable adjustment pursuant to Section 4.1 of the limited liability agreement of Terra
LLC then in effect), and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring Person or
any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the approval
of any holders of Rights (i) prior to the Flip-in Date, in any respect and (ii) on or after the
Flip-in Date, to make any changes that the Company may deem necessary or desirable (x)
that shall not materially adversely affect the interests of the holders of Rights generally
(other than the Acquiring Person or any Affiliate or Associate thereof), (y) in order to
cure any ambiguity or to correct or supplement any provision contained herein which
-64-
may be inconsistent with any other provisions herein or otherwise defective or (z) in
order to satisfy any applicable law, rule or regulation, including any Trading Regulation
on any applicable exchange so as to allow trading of the Company’s securities thereon.
The Rights Agent will duly execute and deliver any supplement or amendment hereto
requested by the Company in writing, provided that the Company has delivered to the
Rights Agent a certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment complies with the terms of this Agreement. The
Rights Agent agrees that time is of the essence in connection with any supplement or
amendment that it is directed to execute. Notwithstanding anything contained in this
Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into
any supplement or amendment that affects the Rights Agent’s own rights, duties,
obligations or immunities under this Agreement.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing (or register on the stock transfer books of the Company) fractional shares
upon exercise, redemption or exchange of Rights, the Company shall, in lieu thereof, in
the sole discretion of the Board of Directors, either (a) evidence such fractional shares by
depositary receipts issued pursuant to an appropriate agreement between the Company
and a depositary selected by it, providing that each holder of a depositary receipt shall
have all of the rights, privileges and preferences to which such holder would be entitled
as a beneficial owner of such fractional share, or (b) pay to the registered holder of such
Rights the appropriate fraction of the Market Price per share in cash. Whenever a
payment for fractional shares is to be made by the Rights Agent, the Company shall (i)
-65-
promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable
detail the facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the
form of fully collected funds to make such payments. The Rights Agent shall be fully
protected in relying upon such a certificate and shall have no duty with respect to, and
shall not be deemed to have knowledge of any payment for, fractional shares under any
Section of this Agreement relating to the payment of fractional shares unless and until the
Rights Agent shall have received such a certificate and sufficient monies.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Sections 3.1(b), 5.10 and 5.13), rights of action in respect of this Agreement,
other than rights of action vested solely in the Rights Agent, the Board of Directors or the
Company, are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other Rights, may,
on such holder’s own behalf and for such holder’s own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder’s right to
exercise such holder’s Rights in the manner provided in such holder’s Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this Agreement.
-66-
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such,
of any Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities that may at any time be issuable on the
exercise of such Rights, nor shall anything contained herein or in any Rights Certificate
be construed to confer upon the holder of any Rights, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 5.8), or to receive dividends or subscription
rights, or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose at
or after the Separation Time and prior to the Expiration Time (i) to effect or permit a
Flip-over Transaction or Event or (ii) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to the Rights Agent and
to each holder of a Right, in accordance with Section 5.9, written notice of such proposed
action, which shall specify the date on which such Flip-over Transaction or Event,
liquidation, dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights to or
on the Company shall be in writing and shall be sufficiently given or made if delivered or
-67-
sent by nationally recognized overnight courier or first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as follows:
TerraForm Power, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or made by
the Company or by the holder of any Rights to or on the Rights Agent shall be
sufficiently given or made if delivered or sent by nationally recognized overnight courier
or first-class mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:
Computershare Trust Company, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Client Services
Notices or demands authorized or required by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Rights shall be sufficiently given
or made if delivered or sent by nationally recognized overnight courier or by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Class A Common Stock. Any notice that is
sent in the manner herein provided shall be deemed given, whether or not the holder
receives the notice.
5.10 Suspension of Exercisability or Exchangeability. To the extent
that the Board of Directors determines in good faith that some action will or need be
-68-
taken pursuant to, or in order to properly give effect to, Section 2.3, 3.1 or 4.4 or to
comply with federal or state securities laws or applicable Trading Regulations, the
Company may suspend the exercisability or exchangeability of the Rights for a
reasonable period sufficient to allow it to take such action or comply with such laws or
Trading Regulations. In the event of any such suspension, the Company may issue a
public announcement (and will provide prompt written notice to the Rights Agent) stating
that the exercisability or exchangeability of the Rights has been temporarily suspended.
Notice thereof pursuant to Section 5.9 shall not be required. Upon such suspension, any
rights of action vested in a holder of Rights shall be similarly suspended.
Failure to give a notice pursuant to the provisions of this Agreement shall
not affect the validity of any action taken hereunder.
5.11 Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
5.12 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this Agreement
and this Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the holders of the Rights.
5.13 Determination and Actions by the Board of Directors, etc. The
Board of Directors (or any duly authorized committee thereof) shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and powers
-69-
specifically granted to the Board of Directors or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations and calculations deemed necessary or advisable for the administration or
implementation of this Agreement, without limitation, including the right to determine
the Rights to be null and void pursuant to Section 3.1, after taking into account the
purpose of this Agreement and the Company’s interest in maintaining an orderly trading
market in the outstanding shares of Class A Common Stock; provided, however, that
nothing in this Section 5.13 shall give the Board of Directors the right to modify the
Rights Agent’s rights, duties, obligations or immunities under this Agreement without the
written consent of the Rights Agent, which may be withheld by the Rights Agent for any
reason or for no reason. All such actions, interpretations, calculations and determinations
done or made by the Board of Directors (including by a committee of the Board of
Directors to the extent permitted by applicable law), shall be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all other
Persons. The Rights Agent shall always be entitled to assume that the Board of Directors
of the Company acted in good faith and the Rights Agent shall be fully protected and
shall incur no liability in reliance thereon.
5.14 Descriptive Headings; Section References. Descriptive headings
appear herein for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof. Where a reference in this Agreement is
-70-
made to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.
5.15 GOVERNING LAW; EXCLUSIVE JURISDICTION.
(a) THIS AGREEMENT, EACH RIGHT AND EACH RIGHTS CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE APPLICABLE TO CONTRACTS ENTERED INTO, MADE WITHIN,
AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS
PROVISIONS OR RULES THAT WOULD CAUSE THE APPLICATION OF LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
(b) (i) THE COMPANY AND EACH HOLDER OF RIGHTS
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE COURT OF CHANCERY OF THE STATE OF DELAWARE, OR, IF SUCH
COURT SHALL LACK SUBJECT MATTER JURISDICTION, THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OVER ANY
SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO OR
CONCERNING THIS AGREEMENT. The Company and each holder of Rights
acknowledge that the forum designated by this paragraph (b) has a reasonable relation to
this Agreement, and to such Persons’ relationship with one another.
-71-
(ii) The Company and each holder of Rights hereby waive, to
the fullest extent permitted by applicable law, any objection which they now or hereafter
have to personal jurisdiction or to the laying of venue of any such suit, action or
proceeding brought in any court referred to in paragraph (b)(i). The Company and each
holder of Rights undertake not to commence any action subject to this Agreement in any
forum other than the forum described in this paragraph (b). The Company and each
holder of Rights agree that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action, or proceeding brought in any such
court shall be conclusive and binding upon such Persons.
5.16 Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile, PDF or other electronic means) and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument. A signature to this Agreement
transmitted electronically shall have the same authority, effect and enforceability as an
original signature.
5.17 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such jurisdiction to the
extent of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or the application of such term
or provision to circumstances other than those as to which it is held invalid or
unenforceable; provided that, if any such excluded term or provision shall adversely
-72-
affect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent
shall be entitled to resign immediately.
5.18 Customer Identification Program. The Company acknowledges
that the Rights Agent is subject to the customer identification program (“Customer
Identification Program”) requirements under the USA PATRIOT Act and its
implementing regulations, and that the Rights Agent must obtain, verify and record
information that allows the Rights Agent to identify the Company. Accordingly, prior to
accepting an appointment hereunder, the Rights Agent may request information from the
Company that will help the Rights Agent to identify the Company, including without
limitation the Company’s physical address, tax identification number, organizational
documents, certificate of good standing, license to do business, or any other information
that the Rights Agent deems necessary. The Company agrees that the Rights Agent
cannot accept an appointment hereunder unless and until the Rights Agent verifies the
Company’s identity in accordance with the Customer Identification Program
requirements.
5.19 Withholding. In the event that the Company, the Rights Agent or
their agents determine that they are obligated to withhold or deduct any tax or other
charge under any applicable law on actual or deemed payments or distributions hereunder
to a holder of the Rights, Class A Common Stock or other cash, securities or other
property, the Company, the Rights Agent or their agents shall be entitled, but not
obligated, to (i) deduct and withhold such amount by withholding a portion or all of the
cash, securities or other property otherwise deliverable or by otherwise using any
-73-
property (including, without limitation, Rights, Preferred Stock, Class A Common Stock
or cash) that is owned by such holder, or (ii) in lieu of such withholding, require any
holder to make a payment to the Company, the Rights Agent or their agents, in each case
in such amounts as they deem necessary to meet their withholding obligations, and in the
case of (i) above, shall also be entitled, but not obligated, to sell all or a portion of such
withheld securities or other property by public or private sale in such amounts and in
such manner as they deem necessary and practicable to pay such taxes and charges.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
TERRAFORM POWER, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chairman and Interim Chief
Executive Officer
COMPUTERSHARE TRUST COMPANY,
N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager, Contract Administration
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR
MANDATORY EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
TERRAFORM POWER, INC.
This certifies that ____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms, provisions and conditions of the
Stockholder Protection Rights Agreement, dated as of July 24, 2016 (as amended from
time to time, the “Rights Agreement”), between TerraForm Power, Inc., a Delaware
corporation (the “Company”), and Computershare Trust Company, N.A., a federally
chartered trust company, as Rights Agent (the “Rights Agent”, which term shall include
any successor Rights Agent under the Rights Agreement), to purchase from the Company
at or at any time after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the Expiration Time (as defined in the Rights Agreement), one
one-hundredth of a fully paid share of Participating Preferred Stock, par value $0.01 per
share (the “Preferred Stock”), of the Company (subject to adjustment as provided in the
Rights Agreement) at the Exercise Price referred to below, upon presentation and
surrender of this Rights Certificate with the Form of Election to Exercise duly executed at
the office of the Rights Agent designated for such purpose. The Exercise Price shall
-2-
initially be $40.00 per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities of the Company other than Preferred Stock or
assets of the Company, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates. Copies of the Rights Agreement are on file at the
principal office of the Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor evidencing
an aggregate number of Rights equal to the aggregate number of Rights evidenced by the
Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be
exercised in part, the registered holder shall be entitled to receive, upon surrender hereof,
another Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain circumstances, at
-3-
its option, at a redemption price of $0.01 per Right or (b) exchanged by the Company
under certain circumstances, at its option, for one share of Class A Common Stock, par
value $0.01 per share, of the Company (the “Class A Common Stock”) or one one-
hundredth of a share of Preferred Stock per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain events as provided
in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities which may at
any time be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised or exchanged as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ____________
-4-
ATTEST: TERRAFORM POWER, INC.
By
Secretary
Countersigned:
COMPUTERSHARE TRUST
COMPANY, N.A.
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby
sells, assigns and transfers unto _____________________________________________
(Please print name
_______________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in an
approved signature guarantee Medallion program), pursuant to Exchange Act Rule
17Ad-15. A notary is not sufficient.
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and shares of
Common Stock (as defined in the Rights Agreement), that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
-2-
NOTICE
In the event the certification set forth above is not properly completed in
connection with a purported assignment, the Company will deem the Beneficial Owner of
the Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any
of the foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable.
Signature
EXHIBIT B
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: TERRAFORM POWER, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights Certificate
to purchase the shares of [Class A Common] [Participating Preferred] Stock issuable
upon the exercise of such Rights and requests that certificates for such shares be issued in
the name of:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of
and delivered to:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in an
-2-
approved signature guarantee Medallion program), pursuant to Exchange Act Rule
17Ad-15. A notary is not sufficient.
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and shares of Common Stock (as defined in the Rights Agreement), that the Rights
evidenced by the attached Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
NOTICE
In the event the certification set forth above is not properly completed in
connection with a purported exercise, the Company will deem the Beneficial Owner of
the Rights evidenced by the attached Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any
of the foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable.
Signature
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF PARTICIPATING PREFERRED STOCK OF TERRAFORM POWER, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, the undersigned, ____________________ and
____________________, the ____________________, and __________, respectively, of
TerraForm Power, Inc., a Delaware corporation (the “Corporation”), do hereby certify as
follows:
Pursuant to authority granted by Article Four of the Amended and
Restated Certificate of Incorporation of the Corporation, as amended, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and other rights
of a new series of the Corporation’s Preferred Stock, par value $0.01 per share, and
certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock,
par value $0.01 per share, of the Corporation, and the designation and certain
terms, powers, preferences and other rights of the shares of such series, and
certain qualifications, limitations and restrictions thereon, are hereby fixed as
follows:
The distinctive serial designation of this series shall be
“Participating Preferred Stock” (hereinafter called “this Series”). Each
share of this Series shall be identical in all respects with the other shares of
this Series except as to the dates from and after which dividends thereon
shall be cumulative.
-2-
The number of shares in this Series shall initially be ___,1 which
number may from time to time be increased or decreased (but not below
the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be cancelled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to
series. Shares of this Series may be issued in fractional shares which are
whole number multiples of one one-hundredth of a share, which fractional
shares shall entitle the holder, in proportion to such holder’s fractional
share, to all rights of a holder of a whole share of this Series.
The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, (A) on each date
that dividends or other distributions (other than dividends or distributions
payable in Class A Common Stock of the Corporation) are payable on or
in respect of Class A Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of this Series
equal to the aggregate amount of dividends or other distributions (other
than dividends or distributions payable in Class A Common Stock of the
Corporation) that would be payable on such date to a holder of the
Reference Package and (B) on the last day of March, June, September and
December in each year, in an amount per whole share of this Series equal
to the excess (if any) of $______2 over the aggregate dividends paid per
whole share of this Series during the three month period ending on such
last day. Each such dividend shall be paid to the holders of record of
shares of this Series on the date, not exceeding sixty days preceding such
dividend or distribution payment date, fixed for this purpose by the Board
of Directors in advance of payment of each particular dividend or
distribution. Dividends on each full and each fractional share of this
Series shall be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share originally
issued after a dividend record date and on or prior to the dividend payment
date to which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect
of the period from such original issuance to such dividend payment date.
The term “Reference Package” shall initially mean 100
shares of Class A common stock, par value $0.01 per share (“Class A
Common Stock”), of the Corporation. In the event the Corporation shall
1 Insert number equal to the number of shares of Class A Common Stock
outstanding on date prior to filing certificate of designation divided by 100.
2 Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the number
of shares of Preferred Stock purchasable upon exercise of one Right.
-3-
at any time after the close of business on ________, ____3 (A) declare or
pay a dividend on any Class A Common Stock payable in Class A
Common Stock, (B) subdivide any Class A Common Stock or (C)
combine any Class A Common Stock into a smaller number of shares,
then and in each such case the Reference Package after such event shall be
the Class A Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Class A Common Stock or in any other
stock ranking junior to this Series as to dividends and upon liquidation)
shall be declared or paid or set aside for payment or other distribution
declared or made upon the Class A Common Stock or upon any other
stock ranking junior to this Series as to dividends or upon liquidation,
unless the full cumulative dividends (including the dividend to be paid
upon payment of such dividend or other distribution) on all outstanding
shares of this Series shall have been, or shall contemporaneously be, paid.
When dividends are not paid in full upon this Series and any other stock
ranking on a parity as to dividends with this Series, all dividends declared
upon shares of this Series and any other stock ranking on a parity as to
dividends shall be declared pro rata so that in all cases the amount of
dividends declared per share on this Series and such other stock shall bear
to each other the same ratio that accumulated dividends per share on the
shares of the Series and such other stock bear to each other. Neither the
Class A Common Stock nor any other stock of the Corporation ranking
junior to or on a parity with this Series as to dividends or upon liquidation
shall be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to
this Series as to dividends and upon liquidation), unless the full
cumulative dividends (including the dividend to be paid upon payment of
such dividend, distribution, redemption, purchase or other acquisition) on
all outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
3 For a certificate of designation relating to shares to be issued pursuant to Section
2.3 of the Rights Agreement, insert the Separation Time. For a certificate of
designation relating to shares to be issued pursuant to Section 3.1(d) of the Rights
Agreement, insert the Flip-in Date.
-4-
In the event of any merger, consolidation, reclassification or other
transaction in which the shares of Class A Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the same
time be similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, that a holder of the
Reference Package would be entitled to receive as a result of such
transaction.
In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Class A
Common Stock or any other stock of the Corporation ranking junior to this
Series upon liquidation, to be paid in full an amount per whole share of
this Series equal to the greater of (A) $0.01 or (B) the aggregate amount
distributed or to be distributed in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such
greater amount being hereinafter referred to as the “Liquidation
Preference”), together with accrued dividends to such distribution or
payment date, whether or not earned or declared. If such payment shall
have been made in full to all holders of shares of this Series, the holders of
shares of this Series as such shall have no right or claim to any of the
remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to the first paragraph of this Section (v), no
such distribution shall be made on account of any shares of any other class
or series of Preferred Stock ranking on a parity with the shares of this
Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the shares
of this Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon such
liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of assets of the Corporation available for
distribution to its stockholders all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v) before any
payment shall be made to the holders of Class A Common Stock or any
other stock of the Corporation ranking junior upon liquidation to this
Series.
-5-
For the purposes of this Section (v), the consolidation or
merger of, or binding statutory share exchange by, the Corporation with
any other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
The shares of this Series shall not be redeemable.
In addition to any other vote or consent of stockholders required by
law or by the Amended and Restated Certificate of Incorporation, as
amended, of the Corporation, and except as otherwise required by law,
each share (or fraction thereof) of this Series shall, on any matter, vote as a
class with any other capital stock comprising part of the Reference
Package and shall have the number of votes thereon that a holder of the
Reference Package would have.
If and whenever dividends payable on this Series and any other
class or series of stock of the Corporation ranking on a parity with this
Series as to payment of dividends (any such class or series being herein
referred to as “dividend parity stock”) shall be in arrears in an aggregate
amount equal to at least six quarterly dividends (whether or not
consecutive), the number of directors then constituting the Board of
Directors shall be increased by two and the holders of shares of this Series,
together with the holders of all other affected classes and series of
dividend parity stock similarly entitled to vote for the election of two
additional directors, voting separately as a single class, shall be entitled to
elect the two additional directors at any annual meeting of stockholders or
any special meeting of the holders of shares of this Series and such
dividend parity stock called as hereinafter provided. Whenever all arrears
in dividends on the shares of this Series and dividend parity stock then
outstanding shall have been paid and dividends thereon for the current
quarterly dividend period shall have been paid or declared and set aside
for payment, then the right of the holders of shares of this Series and such
dividend parity stock to elect such additional two directors shall cease (but
subject always to the same provisions for the vesting of such voting rights
in the case of any similar future arrearages in dividends), and the terms of
office of all persons elected as directors by the holders of shares of this
Series and such dividend parity stock shall forthwith terminate and the
number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so
vested in the holders of shares of this Series and such dividend parity
stock, the Secretary of the Corporation may, and upon the written request
of any holder of shares of this Series (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of shares of this Series and such dividend parity stock for the
election of the two directors to be elected by them as herein provided, such
call to be made by notice similar to that provided in the by-laws for a
special meeting of the stockholders or as required by law. If any such
-6-
special meeting so required to be called shall not be called by the
Secretary within 20 days after receipt of any such request, then any holder
of shares of this Series may (at the Corporation’s expense) call such
meeting, upon notice as herein provided, and for that purpose shall have
access to the stock books of the Corporation. The directors elected at any
such special meeting shall hold office until the next annual meeting of the
stockholders if such office shall not have previously terminated as above
provided. In case any vacancy shall occur among the directors elected by
the holders of shares of this Series and such dividend parity stock, a
successor shall be elected by the Board of Directors to serve until the next
annual meeting of the stockholders upon the nomination of the then
remaining director elected by the holders of shares of this Series and such
dividend parity stock or the successor of such remaining director. If the
holders of shares of this Series become entitled under the foregoing
provisions to elect or participate in the election of two directors as a result
of dividend arrearages, such entitlement shall not affect the right of such
holders to vote as stated in paragraph (vii), including the right to vote in
the election of the remaining directors.
This Series shall rank as to the payment of dividends and
distributions and amounts upon liquidation, dissolution and winding-up
junior to all other series or shares of Preferred Stock unless otherwise
expressly provided in the terms of such series or shares of Preferred Stock.
In the event that the Corporation or its agents determine that they
are obligated to withhold or deduct any tax or other governmental charge
under any applicable law on actual or deemed payments or distributions to
a holder of the shares of this Series, the Corporation or its agents shall be
entitled to (i) deduct and withhold such amount by withholding a portion
or all of the cash, securities or other property otherwise deliverable or by
otherwise using any property that is owned by such holder, or (ii) in lieu
of such withholding, require any holder to make a payment to the
Corporation or its agent, in each case in such amounts as they deem
necessary to meet their withholding obligations, and in the case of (i)
above, shall also be entitled, but not obligated, to sell all or a portion of
such withheld securities or other property by public or private sale in such
amounts and in such manner as they deem necessary and practicable to
pay such taxes and charges.
-7-
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the ____ day of _________, _____.
Attest: