EXHIBIT 4.2
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EXPRESSJET HOLDINGS, INC.,
MELLON INVESTOR SERVICES LLC,
as Rights Agent,
and
CONTINENTAL AIRLINES, INC.
AMENDED & RESTATED
RIGHTS AGREEMENT
Dated as of , 2002
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TABLE OF CONTENTS
Page(s)
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Section 1. Certain Definitions.............................................................................2
Section 2. Appointment of Rights Agent....................................................................12
Section 3. Issue of Right Certificates....................................................................12
Section 4. Form of Right Certificates.....................................................................14
Section 5. Countersignature and Registration..............................................................15
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates........................................16
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights..................................18
Section 8. Cancellation and Destruction of Right Certificates.............................................20
Section 9. Status and Availability of Preferred Shares....................................................20
Section 10. Preferred Shares Record Date...................................................................21
Section 11. Adjustment of Exercise Price, Number of Shares or Number of Rights.............................22
Section 12. Certificate of Adjustment......................................................................34
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................34
Section 14. Fractional Rights and Fractional Shares........................................................36
Section 15. Rights of Action...............................................................................38
Section 16. Agreement of Right Holders.....................................................................39
Section 17. Right Certificate Holder Not Deemed a Stockholder..............................................40
Section 18. Concerning the Rights Agent....................................................................40
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................42
Section 20. Duties of Rights Agent.........................................................................43
Section 21. Change of Rights Agent.........................................................................47
Section 22. Issuance of New Right Certificates.............................................................48
Section 23. Redemption.....................................................................................49
Page(s)
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Section 24. Exchange.......................................................................................50
Section 25. Notice of Certain Events.......................................................................52
Section 26. Notices........................................................................................54
Section 27. Supplements and Amendments.....................................................................55
Section 28. Successors.....................................................................................56
Section 29. Benefits of this Agreement.....................................................................56
Section 30. Severability...................................................................................57
Section 31. Governing Law..................................................................................57
Section 32. Counterparts...................................................................................57
Section 33. Descriptive Headings...........................................................................57
Section 34. Administration.................................................................................57
Section 35. Additional Agreement...........................................................................58
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AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated
Rights Agreement (this "Agreement"), dated as of
______________, 2002 between ExpressJet Holdings, Inc., a Delaware corporation
(the "Company"), Mellon Investor Services LLC, a New Jersey limited liability
company (the "Rights Agent"), and Continental Airlines, Inc., a Delaware
corporation ("Continental") (for purposes of Sections 27, 29 and 35 of this
Agreement).
WHEREAS, the Company, the Rights Agent and Continental are parties to
that certain
Rights Agreement dated as of September 12, 2001 (the "
Rights
Agreement").
WHEREAS, in connection with the adoption of the
Rights Agreement, the
Board of Directors of the Company had authorized and declared a dividend of one
preferred share purchase right (a "Right") for each share of Class A Common
Stock, par value $.01 per share, of the Company (the "Class A Common Shares")
and Class B Common Stock, par value $.01 per share, of the Company (the "Class B
Common Shares") outstanding at the Close of Business on September 12, 2001 (the
"Record Date"), each Right representing the right to purchase one one-thousandth
of a Preferred Share (as hereinafter defined), or such different amount or kind
of securities as is herein provided upon the terms and subject to the conditions
herein set forth, and had further authorized and directed the issuance of one
Right with respect to each additional Class A Common Share and Class B Common
Share that shall become outstanding between the Record Date and the earliest of
the Close of Business on the Distribution Date, the Redemption Date and the
Close of Business on Final Expiration Date (as such terms are hereinafter
defined) and certain additional Common Shares that shall become outstanding
after the Distribution Date as provided in Section 22 of this Agreement.
WHEREAS, pursuant to the Restated Certificate of Incorporation of the
Company to be filed with the Secretary of State of the State of Delaware (the
"Second Restated Certificate of Incorporation"), each Class A Common Share,
issued and outstanding immediately prior to the effectiveness of the Second
Restated Certificate of Incorporation (the "Effective Time") will be
reclassified, changed and converted into 1.770491804 shares of Common Stock (as
hereinafter defined) and each 22,000,000 Class B Common Shares, issued and
outstanding immediately prior to the Effective Time, will be reclassified,
changed and converted into one share of Special Voting Preferred Stock, par
value $.01 per share, of the Company (such reclassification of the Class A
Common Shares and Class B Common Shares, the "Reclassification").
WHEREAS, the parties to the
Rights Agreement wish to amend the
Rights
Agreement to reflect the change to the capital structure of the Company as a
result of the Reclassification;
WHEREAS, this Agreement has been approved by the Required Board Vote
(as hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
Common Shares representing 15% or more (or, if such Person is an Institutional
Investor, 20% or more) of the Voting Power of the Common Shares of the Company
then outstanding. Notwithstanding the foregoing, no Person shall (1) be or
become an Acquiring Person if such Person is an Exempt Person (so long as such
Person
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remains an Exempt Person), (2) become an Acquiring Person as the result of an
acquisition of Common Shares by the Company; provided, however, that if a Person
shall so become the Beneficial Owner of Common Shares representing 15% or more
(or, if such Person is an Institutional Investor, 20% or more) of the Voting
Power of the Common Shares of the Company then outstanding by reason of the
acquisition of Common Shares by the Company, and shall, after such share
purchases by the Company, purchase or otherwise take action to cause it to
become the Beneficial Owner of Common Shares representing an additional 1% of
the Voting Power of the Common Shares of the Company then outstanding, then such
Person shall be an Acquiring Person, (3) become an Acquiring Person if (A) such
Person becomes the Beneficial Owner of Common Shares representing 15% or more
(or, if such Person is an Institutional Investor, 20% or more) of the Voting
Power of the Common Shares then outstanding solely as the result of an
adjustment to the Voting Power of the Common Shares beneficially owned by such
Person due to the application of Article Eight of the Second Restated
Certificate of Incorporation and related provisions of the Company's bylaws and
(B) immediately prior to such adjustment, such Person did not beneficially own
Common Shares representing 15% or more (or, if such Person is an Institutional
Investor, 20% or more) of the Voting Power of the Common Shares then
outstanding; provided, however, that if a Person shall so become the Beneficial
Owner of Common Shares representing 15% or more (or, if such Person is an
Institutional Investor, 20% or more) of the Voting Power of the Common Shares of
the Company then outstanding by reason of such adjustment, and shall, after such
adjustment, purchase or otherwise take action to cause it to become the
Beneficial Owner of Common Shares representing an additional 1% of the Voting
Power of the Common Shares of the Company then outstanding, then such Person
shall be an Acquiring Person, or (4) be or become an Acquiring Person if the
Board of Directors determines in good faith that a Person who would otherwise be
an
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Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an Acquiring Person, as defined pursuant to the foregoing provisions
of this paragraph, then such Person shall not be an Acquiring Person for any
purposes of this Agreement. Notwithstanding any of the foregoing, in the event
that the Board of Directors determines in good faith that a Person no longer
meets the requirements set forth in the definition of "Institutional Investor,"
then such Person shall as promptly as practicable divest itself of a sufficient
number of Common Shares so that such Person beneficially owns Common Shares
representing less than 15% of the Voting Power of the Common Shares then
outstanding. If the Board of Directors determines in good faith that such Person
does not divest itself of Common Shares in accordance with the requirements set
forth in the prior sentence, then such Person shall be or become an "Acquiring
Person" for any and all purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule l2b-2 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement.
"Approved Affiliate" shall mean, with respect to a Person, one or more
of the Affiliates of that Person that becomes such with the prior approval of
that Person.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage
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of time or the satisfaction of one or more conditions) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), written or otherwise, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be the
Beneficial Owner of, or beneficially own, securities tendered pursuant to a
tender or exchange offer made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided, however,
that a Person shall not be the Beneficial Owner of, or beneficially own, any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule l3D under the
Exchange Act (or any comparable or successor report); or (C) "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement);
or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), written or otherwise, for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
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proviso to section (B) of the immediately preceding paragraph (ii)) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
"Board of Directors" means the board of directors of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday,
holiday or a day on which banking institutions in the City of Houston, Texas or
the State of New Jersey are authorized or obligated by law or executive order to
close.
"CAL" shall mean Continental and its Controlled Affiliates and its
Approved Affiliates.
"Capacity Purchase Agreement" shall mean that certain Capacity Purchase
Agreement, dated as of January 1, 2001, among the Company, Continental and
ExpressJet Airlines, Inc., a Delaware corporation and a wholly owned subsidiary
of the Company.
"Close of Business" on any given date shall mean 5:00 p.m., central
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., central time, on the next succeeding Business Day.
"Common Shares" when used with reference to the Company shall mean the
Common Stock, par value $.01 per share, of the Company. "Common Shares" when
used with reference to any Person other than the Company (or, in the event of a
transaction referred to in Section 13 hereof, if the Company is the surviving
corporation or the successor when thereafter used with reference to the Company)
shall mean the capital stock (or equity interest) with the
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greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
"common stock equivalents" shall have the meaning set forth in Section
11(a)(iii)(B)(3) hereof.
"Continental" shall have the meaning set forth in the recitals hereof.
"Continuing Directors" shall mean those directors who were members of
the Board of Directors of the Company at the time the Company entered into this
Agreement and any director who subsequently becomes a member of the Board of
Directors, if such director's nomination for election or appointment to the
Board of Directors is recommended or approved by the majority vote of the
Continuing Directors then in office.
"Control" (including "controlled by") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Controlled Affiliate" shall mean, with respect to a Person, one or
more of the Affiliates of that Person that is directly or indirectly controlled
by that Person.
"Current Value" shall have the meaning set forth in Section
11(a)(iii)(A)(1) hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any Subsidiary of the
Company, (iv) any entity holding Common Shares for or pursuant to the terms of
any such employee
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benefit plan, (v) CAL, until the end of the Term (as defined in the Capacity
Purchase Agreement), unless at such time CAL beneficially owns Common Shares
representing at least 5% of the Voting Power of the Common Shares then
outstanding, in which case until such time CAL ceases to beneficially own Common
Shares representing at least 5% of the Voting Power of the Common Shares then
outstanding and (vi) subject to the remainder of this paragraph, any Person who
or which, together with its Affiliates or Associates (collectively, an "Exempt
Recipient"), becomes the Beneficial Owner of Common Shares representing 15% or
more of the Voting Power of the Company then outstanding as a result of any
transaction with CAL with respect to the Common Shares of which CAL is the
Beneficial Owner (an "Exempt Transaction"). The highest percentage of Voting
Power of the Common Shares beneficially owned by an Exempt Recipient immediately
following any Exempt Transaction is hereafter referred to as the "Permitted
Percentage" with respect to such Exempt Recipient. The Permitted Percentage with
respect to an Exempt Recipient will automatically be reduced (but not below 14%
(19% if such Person is an Institutional Investor) of the Voting Power of the
Common Shares of the Company then outstanding) if such Exempt Recipient ceases
to beneficially own any of such Common Shares or the Voting Power of the Common
Shares beneficially owned by such Exempt Recipient otherwise decreases, and
increased as necessary upon (i) the acquisition of Common Shares by the Company
or (ii) an adjustment to the Voting Power of the Common Shares beneficially
owned by such Person due to the application of Article Eight of the Second
Restated Certificate of Incorporation and related provisions of the Company's
bylaws. An Exempt Recipient shall cease to be an Exempt Person at any time such
Exempt Recipient purchases or otherwise takes action causing it to become the
Beneficial Owner of Common Shares representing an additional 1% of the Voting
Power of the Common Shares of the
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Company above the Permitted Percentage then applicable to such Exempt Recipient.
In determining the percentage of the Voting Power of the Common Shares
beneficially owned by an Exempt Recipient, the Company may rely on information
set forth in or derived from any Schedule on file with the Securities and
Exchange Commission pursuant to the requirements of Rule 13d-1 under the
Exchange Act filed by such Exempt Recipient.
"Exercise Price" shall have the meaning set forth in Section 7(b).
"Final Expiration Date" shall mean September 12, 2011.
"Institutional Investor" shall mean a Person who has a Schedule 13G on
file with the Securities and Exchange Commission pursuant to the requirements of
Rule 13d-1 under the Exchange Act with respect to its holdings of the Company's
voting securities ("Schedule 13G"), so long as (i) such Person is principally
engaged in the business of managing investment funds for unaffiliated securities
investors and, as part of such Person's duties as agent for fully managed
accounts, holds or exercises voting or dispositive power over Common Shares,
(ii) such Person acquires Beneficial Ownership of Common Shares pursuant to
trading activities undertaken in the ordinary course of such Person's business
and not with the purpose nor the effect, either alone or in concert with any
Person, of exercising the power to direct or cause the direction of the
management and policies of the Company or of otherwise changing or influencing
the control of the Company, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to
Rule 13d-3(b) of the Exchange Act and (iii) if such Person is a Person included
in Rule 13d-1(b)(1)(ii) of the Exchange Act, such Person is not obligated to,
and does not, file a Schedule 13D with respect to the securities of the Company.
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"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability partnership, business trust, limited
liability company, unincorporated association, or joint venture or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean the shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
such rights and preferences as are set forth in the form of Certificate of
Designation set forth as Exhibit A hereto, as the same may be amended from time
to time.
"Record Date" shall have the meaning set forth in the recitals hereof.
"Redemption Date" shall have the meaning set forth in Section 23
hereof.
"Redemption Price" shall mean $.001 per Right, appropriately adjusted
to reflect any stock split, stock dividend, or similar transaction occurring
after the date hereof.
"Required Board Vote" shall mean approval of an action by the Board of
Directors by the affirmative vote of two-thirds of the Whole Board, including
the affirmative vote of two-thirds of the Continuing Directors then in office;
provided that with respect to any action to amend, eliminate or otherwise change
clause (v) or clause (vi) of the definition of Exempt Person or to change this
definition of "Required Board Vote," the term "Required Board Vote" shall mean,
until the end of the Term (as defined in the Capacity Purchase Agreement),
unless at such time CAL beneficially owns Common Shares representing at least 5%
of the Voting Power of the Common Shares then outstanding, in which case until
such time CAL ceases to beneficially own Common Shares representing at least 5%
of the Voting Power of the Common Shares then outstanding, approval of such
action by the unanimous affirmative vote of the Whole Board.
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"Restated Certificate of Incorporation" shall mean the Company's
Restated Certificate of Incorporation filed with the Secretary of State of the
State of Delaware on September 7, 2001, as the same may be amended from time to
time.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form of Exhibit B hereto.
"Rights Agent" shall have the meaning set forth in the recitals hereof.
"Second Restated Certificate of Incorporation" shall have the meaning
set forth in the recitals hereof.
"Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Section 13 Trigger Date" shall have the meaning set forth in Section
13 hereof.
"Shares Acquisition Date" shall mean the earlier of the date of (i) the
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such or (ii) the public disclosure of facts by the Company or
an Acquiring Person indicating that an Acquiring Person has become such.
"Spread" shall have the meaning set forth in Section 11(a)(iii)(A)
hereof.
"Subsidiary" of any Person shall mean any Person of which a majority of
the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Voting Power" shall mean the total number of votes entitled to be cast
by the holders of the Common Shares of the Company then outstanding taking into
account the operation
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of Article Eight of the Second Restated Certificate of Incorporation and related
provisions of the Company's bylaws.
"Whole Board" shall mean the total number of authorized directors
regardless of whether there exist any vacancies in such authorized
directorships.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents, as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than an Exempt Person) of, or of the first public announcement of the
intention of any Person (other than an Exempt Person) to commence, a tender or
exchange offer the consummation of which could result in any Person becoming an
Acquiring Person (such earlier date being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates other than for purposes of this Section 3 and
any provision of this Agreement referring to the issuance or distribution of
Right Certificates) and not by separate Right Certificates, and (y) the Rights
(and the right to receive Right Certificates) will be transferable only in
connection with the transfer of
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Common Shares. As soon as practicable after the Company has notified the Rights
Agent in writing of the occurrence of the Distribution Date, and if such
notification is given orally, the Company shall confirm the same in writing on
or prior to the Business Day next following, the Company will prepare and
execute, (and, if at such time, the Rights Agent is not also the Company's
transfer agent, provide the Rights Agent with a list of stockholders (together
with all other necessary information)), the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send at the expense of the Company) by first-class, insured,
postage-prepaid mail (or such other method of delivery selected by the Company),
to each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate evidencing one Right for each Common Share so held
(subject to adjustment as provided in this Agreement). Until such notice is
received by the Rights Agent, the Rights Agent may presume conclusively for all
purposes that the Distribution Date has not occurred. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) The Rights Agent will mail to any holder of the Right
Certificates a copy of this Agreement without charge to the holder (but at the
expense of the company after receipt of a written request therefor). With
respect to certificates representing Common Shares outstanding immediately
following the Effective Time, until the Close of Business on the Distribution
Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof. Until the Close of Business on the Distribution Date (or
the earlier of the Redemption Date or the Close of Business on the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding immediately following the Effective Time, shall also
constitute the transfer of the Rights associated with the Common Shares
evidenced thereby.
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(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Effective Time but prior to the
earliest of the Close of Business on the Distribution Date, the Redemption Date
or the Close of Business on the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them substantially the following
legend:
This certificate also evidences and entitles the holder hereof
to certain rights (the "Rights") as set forth in the Amended
and Restated
Rights Agreement between ExpressJet Holdings,
Inc., Mellon Investor Services LLC and Continental Airlines,
Inc., dated as of _____________, 2002 as it may from time to
time be amended or supplemented pursuant to its terms (the
"
Rights Agreement"), the terms of which are hereby
incorporated herein by reference. A copy of the Rights
Agreement is on file at the principal executive offices of
ExpressJet Holdings, Inc. Under certain circumstances set
forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by
this certificate. Mellon Investor Services LLC will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, Rights that are or were acquired
or beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Close of Business on the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Close of Business on the
Distribution Date, any Rights associated with such Common Shares shall be
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Shares that are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall
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be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate, provided that such marks,
legends, summaries and endorsements do not affect the rights, duties or
responsibilities of the Rights Agent and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the other provisions of this
Agreement, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-thousandths of a Preferred Share as shall be set forth
therein at the Exercise Price, but the number of one one-thousandths of a
Preferred Share and the Exercise Price shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature; shall have affixed thereto
the Company's seal or a facsimile thereof; and shall be attested by the
Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Agent shall countersign the Right Certificates,
either manually or by facsimile signature, and the Right Certificates shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nonetheless be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
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Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
Following the Distribution Date and receipt by the Rights Agent of
written notice to that effect and all other relevant information, the Rights
Agent will keep or cause to be kept, at its office designated for such purpose,
books for registration of the transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and prior to the
earlier of the Redemption Date or the Close of Business on the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become null and void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of
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the Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have properly completed and signed the certificate contained in the form
of assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall request. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient for any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. The Rights Agent shall have no duty or obligation under this
Section 6 or any other similar provision of this Agreement unless and until it
is satisfied that all such taxes and/or governmental charges have been paid in
full.
(b) Upon receipt by the Company and the Rights Agent of
evidence satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's or the Rights Agent's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
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Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate (other than
a holder whose Rights have become null and void pursuant to Section 11(a)(ii)
hereof or have been exchanged pursuant to Section 24 hereof) may exercise the
Rights evidenced thereby in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at its
office designated for such purpose, together with payment of the Exercise Price
for each one one-thousandth of a Preferred Share as to which the Rights are
exercised, prior to the earliest of (i) the Close of Business on the Final
Expiration Date, (ii) the time at which the right to exercise the Rights
terminates pursuant to Section 23 hereof, or (iii) the time at which the right
to exercise the Rights terminates pursuant to Section 24 hereof.
(b) The purchase price for each one one-thousandth of a
Preferred Share to be purchased upon the exercise of a Right shall initially be
Eighty Dollars ($80.00) (the "Exercise Price"), shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof, and shall be payable
in lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and certificate duly
executed, accompanied by payment of the Exercise Price for the number of one
one-thousandths of a Preferred Share to be purchased and an amount equal to any
applicable tax or governmental charge required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of one
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one-thousandths of a Preferred Share to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) requisition from any depositary agent for the Preferred Shares depositary
receipts representing such number of one one-thousandths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs any such depositary agent to
comply with such request, (ii) when necessary to comply with this Agreement,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional Preferred Shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when necessary to comply with this Agreement, after receipt,
deliver the cash described in clause (iii) above to or upon the order of the
registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the unexercised Rights shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 6 and Section 14
hereof.
(e) 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 a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate following
the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or
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former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request.
(f) The Rights Agent shall have no liability to any holder of
Rights or any other Person as a result of the Company's failure to make any
determination under this Section 7 or any other section with respect to an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or
transferees hereunder.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Status and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Exercise Price), be duly and
validly authorized and issued and fully paid and non-assessable shares.
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(b) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and governmental charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise; or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender); or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
(c) The Company covenants and agrees that it will cause to be
reserved and kept available, out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares
that will be sufficient to permit the exercise in full of all outstanding Rights
in accordance with Section 7 hereof.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes have become the holder of record of the Preferred Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Exercise Price (and any applicable transfer taxes or governmental charges)
was made. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other
-21-
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights. The Exercise Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Exercise Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to the following paragraph of this
subparagraph (ii) and to Section 24 of this Agreement, in the event any Person
shall become an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal
-22-
to the then current Exercise Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of such number of
Preferred Shares for which a Right is then exercisable, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then current
Exercise Price by the number of one one-thousandths of a Preferred Share for
which a Right was or would have been exercisable (if the Rights had been
exercisable) as of immediately prior to such Person becoming an Acquiring Person
and dividing that product by (y) 50% of the then current per share market price
of the Common Shares (determined pursuant to Section 11(d) hereof) on the date
such Person became an Acquiring Person. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action that would eliminate or diminish the benefits intended
to be afforded by the Rights.
From and after the occurrence of such an event, any Rights that are or
were acquired or beneficially owned by such Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) on or after the earlier of (x) the date
of such event and (y) the Distribution Date, shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to Section 3 that represents Rights beneficially owned by an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence or
any Associate, Affiliate or transferee thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be null and void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person whose Rights would be
-23-
null and void pursuant to the preceding sentence or any Associate or Affiliate
thereof shall be canceled.
(iii) In the event that the number of Common Shares
which are authorized by the Company's certificate of incorporation and not
outstanding or subscribed for, or reserved or otherwise committed for issuance
for purposes other than upon exercise of the Rights, are not sufficient to
permit the holder of each Right to purchase the number of Common Shares to which
he would be entitled upon the exercise in full of the Rights in accordance with
subparagraph (ii) of paragraph (a) of this Section 11, or should the Board of
Directors so elect, the Company shall: (A) determine the excess of (1) the value
of the Common Shares issuable upon the exercise of a Right (calculated as
provided in the last sentence of this subparagraph (iii)) pursuant to Section
11(a)(ii) hereof (the "Current Value") over (2) the Exercise Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon payment of the applicable Exercise
Price, any one or more of the following having an aggregate value determined by
the Board of Directors to be equal to the Current Value: (1) cash; (2) a
reduction in the Exercise Price; (3) Preferred Shares or other equity securities
of the Company (including, without limitation, shares, or units or fractions of
shares, of preferred stock which the Board of Directors has determined to have
the same value as the Common Shares (such shares of preferred stock, "common
stock equivalents")); (4) debt securities of the Company; or (5) other assets;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
first occurrence of an event triggering the rights to purchase Common Shares
described in Section 11(a)(ii) (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Exercise Price, Common Shares (to the
-24-
extent available) and then, if necessary, cash, which shares and cash have an
aggregate value equal to the Spread. If the Board of Directors shall determine
in good faith that it is likely that sufficient additional Common Shares could
be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof and the last
paragraph of Section 11(a)(ii) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall make a
public announcement, and shall promptly deliver to the Rights Agent a statement,
stating that the exercisability of the Rights has been temporarily suspended. At
such time as the suspension is no longer in effect, the Company shall make
another public announcement, and promptly deliver to the Rights Agent a
statement, so stating. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market price (as determined
pursuant to Section 11(d)(i) hereof) of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any common stock equivalent shall be
deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within
-25-
45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights, powers and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Exercise Price to be in effect after
such record date shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price and the denominator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a reasonably detailed
statement filed with the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or
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warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a reasonably
detailed statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be the average of the daily closing
prices per share of such Security for the thirty
-27-
(30) consecutive Trading Days (as such term is hereinafter defined) immediately
prior to, but not including, such date; provided, however, that in the event
that the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then, and
in each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the
New York Stock Exchange or, if the Security
is not listed or admitted to trading on the
New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open
-28-
for the transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by 1000. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a reasonably detailed statement filed with the Rights Agent.
(e) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Exercise Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one ten-millionth
of a Preferred Share or one ten-thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than three (3)
years from the date of the transaction that requires such adjustment.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital
-29-
stock of the Company other than Preferred Shares, the number of such other
shares so receivable upon exercise of any Right shall thereafter be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10
and 13 with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
one one-thousandths of a Preferred Share (calculated to the nearest one
ten-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-thousandths of a share covered by a Right immediately prior to this
adjustment by (y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment of the Exercise
Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights in substitution
for any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a Preferred Share for which a Right was exercisable
immediately
-30-
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest one millionth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price. The Company shall
make a public announcement (with prompt written notice thereof to the Rights
Agent) of its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Exercise Price is
adjusted or any day thereafter, but, if the Right Certificates have been
distributed, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been distributed, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of one one-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price and
-31-
the number of one one-thousandths of a Preferred Share, which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below one one-thousandth of the then par value of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuing to
the holder of any Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due ββββ or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible
-32-
into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares
payable in Preferred Shares or (v) issuance of any rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise other than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such case
(i) the number of one one-thousandths of a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-thousandths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
Voting Power of the number of Common Shares outstanding immediately before such
event and the denominator of which is the Voting Power of the number of Common
Shares outstanding immediately after such event, and (ii) each Common Share
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each Common Share outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.
(o) Each Common Share that becomes outstanding as a result of
the Reclassification shall have one Right attached thereto. Upon the Effective
Time, the Rights that were previously attached to the Class A Common Shares and
Class B Common Shares outstanding immediately prior to the Effective Time shall
become void.
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Section 12. Certificate of Adjustment. Whenever an adjustment is made
as provided in Sections 11 or 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment, and a brief, reasonably detailed
statement of the facts, computations and methodology accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the
Preferred Shares or the Common Shares a copy of such certificate and (c) if such
adjustment occurs following a Distribution Date, mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained, and shall not be obligated or responsible for
calculating any adjustment, nor shall it be deemed to have a duty with respect
to nor knowledge of such an adjustment unless and until it shall have received
such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event that, at any time after a Person becomes an
Acquiring Person, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries (the date of any such event, a "Section 13 Trigger Date"), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter have the right to
receive,
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upon the exercise thereof at a price equal to the then current Exercise Price
multiplied by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares for which a Right is then exercisable, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Exercise Price by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of such other Person (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company covenants and agrees that it shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall
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similarly apply to successive mergers or consolidations or sales or other
transfers. For purposes hereof, the "earning power" of the Company and its
Subsidiaries shall be determined in good faith by the Company's Board of
Directors on the basis of the operating earnings of each business operated by
the Company and its Subsidiaries during the three (3) fiscal years preceding the
date of such determination (or, in the case of any business not operated by the
Company or any Subsidiary during three (3) full fiscal years preceding such
date, during the period such business was operated by the Company or any
Subsidiary).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid
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and low asked prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares. Fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to each registered holder of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share as the fraction of
one Preferred Share that such holder would otherwise receive upon the exercise
of the aggregate number of Rights exercised by such holder. For the purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise multiplied by 1000.
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(c) The holder of a Right by the acceptance of the Right
expressly waives any right to receive fractional Rights or fractional shares
upon exercise of a Right except as provided above.
(d) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly prepare
and deliver to the Rights Agent a certificate setting forth in reasonable detail
the facts related to such payment and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 or Section 20 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may,
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), on his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right 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
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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.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books maintained by the Rights Agent if
surrendered at the office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer with a properly
completed form of certification;
(c) the Company and the Rights Agent may treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
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interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its reasonable best efforts to have
any such order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, 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 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, legal fees and disbursements incurred in the preparation, delivery,
acceptance, administration, execution and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent, and its officers, agents and directors for, and to
hold each of them
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harmless against, any loss, liability, damage, judgment, ruling (interlocutory
or final), fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct (as finally determined
by a court of competent jurisdiction) on the part of the Rights Agent, for any
action taken, suffered or omitted by the Rights Agent or such indemnified party
in connection with the acceptance or administration of this Agreement or the
exercise or performance of its duties hereunder, including, without limitation,
the costs and expenses of defending against any claim of liability in the
premises. The provisions of this Section 18 and Section 20 below shall survive
the exercise or expiration of the Rights, the termination or expiration of this
Agreement, and the resignation or removal of the Rights Agent. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company.
The Rights Agent may conclusively rely upon and shall be authorized and
protected by the Company and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or 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
otherwise upon the advice of counsel as set forth in Section 20 hereof. The
Rights Agent shall not be deemed to have any duty or notice unless and until the
Company has provided the Rights Agent with actual written notice.
-41-
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Rights Agent be liable for special, punitive, incidental, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of the action. Any liability of
the Rights Agent under this Agreement shall be limited to the amount of fees
paid by the Company to the Rights Agent; provided, however, with respect to
liability arising from the bad faith or willful misconduct (as finally
determined by a court of competent jurisdiction) of the Rights Agent, the
liability of the Rights Agent shall not be so limited.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
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
shall be a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such
-42-
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement upon the following
terms and conditions, and no implied duties or obligations shall be read into
this Agreement against the Rights Agent, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or
omitting any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
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conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the General Counsel, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct (as finally determined by
a court of competent jurisdiction).
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be liable for, nor be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it have any liability for nor be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it have any liability
for, nor be responsible for any adjustment required under Sections 11 or 13
hereof or for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or
-44-
warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Rights Certificate or as to whether any
Preferred Shares will, when so issued, be validly authorized and issued, 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 by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept advice or instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, any Executive Vice
President, the General Counsel, the Managing Attorney - Corporate and the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such advice or instructions
shall be full authorization 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 good faith in accordance with the advice or instructions of any
such officer. The Rights Agent shall be fully protected and authorized in
relying upon the most recent advice or instructions received by any such
officer. Any application by the Rights Agent for written advice or instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be taken,
suffered by or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, suffered by or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five (5)
Business Days after the date any officer of
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the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written advice or instructions in response to such
application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company 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
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, default, neglect or misconduct.
(j) Except as otherwise provided herein, the Rights Agent
shall not be required 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 reasonably assured to it.
(k) The Rights Agent shall not be required to take notice or
be deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person,
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Affiliate or Associate) under this Agreement unless and until the Rights Agent
shall be specifically notified in writing by the Company of such fact, event or
determination.
(l) 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, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and the Preferred Shares by registered or
certified mail and, at the expense of the Company, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares and the Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall
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be (i) a Person organized and doing business under the laws of the United States
or of any other state of the United States, in good standing, which is
authorized under such laws to conduct shareholder services business and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million dollars or (ii) a subsidiary of a Person
described in clause (i) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and the Preferred Shares, and mail
a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the earlier of the Redemption Date and the Close
-48-
of Business on the Final Expiration Date, the Company may with respect to Common
Shares so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employment plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale.
Section 23. Redemption.
(a) At any time prior to the time any Person becomes an
Acquiring Person, the Board of Directors may, by the Required Board Vote, redeem
all but not less than all of the then outstanding Rights at the Redemption
Price. The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and subject to such conditions as the
Board of Directors in its sole discretion may establish. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based on the market
price thereof, as determined by the Board of Directors) or other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of the redemption of
the Rights pursuant to paragraph (a) of this Section 23 or such earlier time as
may be determined by the Board of Directors, by the Required Board Vote, in the
action ordering such redemption (although not earlier than the time of such
action) (such time the "Redemption Date"), and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly notify the Rights Agent in writing of such
redemption and shall give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall
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not affect the validity of such redemption. Within ten (10) days after such
action of the Board of Directors ordering the redemption of the Rights pursuant
to paragraph (a), the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. If the payment of the Redemption Price is
not included with such notice, each such notice shall state the method by which
the payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, other than in connection with the purchase
of Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, any entity holding Common
Shares for or pursuant to the terms of any such plan or any Exempt Person),
together with all
-50-
Affiliates and Associates of such Person, becomes the Beneficial Owner of Common
Shares representing a majority of the Voting Power then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of the
exchange. The Company promptly shall mail a notice of the exchange to the Rights
Agent and to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares or common stock equivalents for
Common Shares exchangeable for Rights, at the initial rate of one one-thousandth
of a Preferred Share (or an appropriate number of common stock equivalents) for
each Common Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms
-51-
thereof, so that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common
Shares, Preferred Shares or common stock equivalents authorized by the Company's
certificate of incorporation and not outstanding or subscribed for, or reserved
or otherwise committed for issuance for purposes other than upon exercise of
Rights, to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares, Preferred Shares or common stock equivalents
for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current per share market value of a whole Common Share.
For the purposes of this paragraph (e), the current per share market value of a
whole Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall, after the Distribution Date,
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
-52-
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least ten (10) days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least ten (10) days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
the Rights Agent and to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such
-53-
event, which notice shall describe such event and the consequences of such event
to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
ExpressJet Holdings, Inc.
ββββ βββββ ββββββ, ββββ. βββββ
βββββββ, βββββ βββββ
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sent by registered or
certified mail and shall be deemed given upon receipt and addressed (until
another address is filed in writing with the Company) as follows:
Mellon Investor Services LLC
Plaza of the Americas
βββ βββββ βββββ ββββββ, βββββ ββββ
ββββββ, βββββ βββββ
Attention: Relationship Manager
with a copy to:
Mellon Investor Services LLC
ββ ββββββββββ ββββ
ββββββββββ ββββ, βββ ββββββ βββββ
Attention: General Counsel
Notices or demands authorized by this Agreement to be given to Continental shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Continental Airlines, Inc.
ββββ βββββ ββββββ, βββββ
βββββββ, ββ βββββ
Attention: General Counsel
-54-
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may, by the
Required Board Vote, from time to time, and the Rights Agent shall, if the
Company directs, supplement or amend this Agreement without the approval of any
holders of Right Certificates to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any change to or delete any provision hereof
or to adopt any other provisions with respect to the Rights which the Company
may deem necessary or desirable; provided, however, that from and after such
time as any Person becomes an Acquiring Person, this Agreement shall not be
amended or supplemented in any manner which would adversely affect the interests
of the holders of Rights (other than an Acquiring Person and its Affiliates and
Associates). Notwithstanding anything contained in this Agreement to the
contrary, until the end of the Term (as defined in the Capacity Purchase
Agreement), unless at such time CAL beneficially owns Common Shares representing
at least 5% of the Voting Power of the Common Shares then outstanding, in which
case until such time CAL ceases to beneficially own Common Shares representing
at least 5% of the Voting Power of the Common Shares then outstanding, no
supplement or amendment to this Agreement shall be made that deletes, amends,
eliminates or otherwise changes clause (v) or clause (vi) of the definition of
Exempt Person or Sections 29 or 35 of this Agreement or this sentence or
otherwise has the effect of amending, eliminating or otherwise changing Sections
29 or 35 of this Agreement or clause (v) or clause (vi) of
-55-
the definition of Exempt Person or this sentence without the prior written
consent of Continental, which may be withheld in Continental's sole discretion.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment to this Agreement shall be made which reduces the
Redemption Price, provides for an earlier Final Expiration Date, alters the
provisions of Section 23(a) relating to the redemption of the Rights, or extends
the time during which the Rights may be redeemed if, in any such case, at the
time of such supplement or amendment the Rights are not redeemable.
Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights, duties, liabilities and
obligations of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent. Upon the delivery of a certificate from an appropriate officer of
the Company, and if requested by the Rights Agent, an opinion of counsel, which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
Section 28. 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.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent, the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares), and CAL (with respect to Sections 27 and 35 of this
Agreement), any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent, the registered holders of the Right Certificates (and, prior
to the
-56-
Distribution Date, the Common Shares) and CAL (with respect to Sections 27 and
35 of this Agreement).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties, obligations and liabilities of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Administration. The Board of Directors, by the Required
Board Vote, shall have the exclusive power and authority to administer and
interpret the provisions of this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or the Company or as may be
necessary or advisable in the administration of this
-57-
Agreement. All such actions, calculations, determinations and interpretations
which are done or made by the Board of Directors in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other Person and shall not subject the Board of Directors to any
liability to the holders of the Rights. The Rights Agent shall always be
entitled to assume that the Board of Directors acted in good faith and shall
incur no liability in reliance thereof.
Section 35. Additional Agreement. Until the end of the Term (as defined
in the Capacity Purchase Agreement), unless at such time CAL beneficially owns
Common Shares representing at least 5% of the Voting Power of the Common Shares
then outstanding, in which case until such time as CAL ceases to beneficially
own Common Shares representing at least 5% of the Voting Power of the Common
Shares then outstanding, the Company shall not, without the prior written
consent of Continental, which may be withheld in Continental's sole discretion,
take any action to approve, adopt or implement a rights agreement or any other
agreement having a similar effect, whether upon the expiration or termination of
this Agreement or otherwise, unless such rights agreement or other agreement (i)
includes CAL and any Exempt Recipient as an Exempt Person (or any term with a
definition under such agreement similar thereto), (ii) exempts CAL and any
Exempt Recipient from the definition of Acquiring Person (or any term under such
agreement with a definition similar thereto), (iii) exempts CAL and any Exempt
Recipient from the restrictions thereof and (iv) contains a provision providing
that no supplement, amendment, change or alteration to such rights agreement or
other agreement shall be made that deletes, amends, eliminates or otherwise
changes the provisions thereof that implement clauses (i), (ii), (iii) and (iv)
of this
-58-
Section 35 or otherwise has the effect of amending, eliminating or otherwise
changing the provisions thereof which implement clauses (i), (ii), (iii) and
(iv) of this Section 35, without the prior written consent of Continental, which
may be withheld in Continental's sole discretion. Notwithstanding anything
contained in this Agreement to the contrary, until the end of the Term (as
defined in the Capacity Purchase Agreement), unless at such time CAL
beneficially owns Common Shares representing at least 5% of the Voting Power of
the Common Shares then outstanding, in which case until such time as CAL ceases
to beneficially own Common Shares representing at least 5% of the Voting Power
of the Common Shares then outstanding, this Section 35 shall not be amended
without the prior written consent of Continental, which may be withheld in
Continental's sole discretion. The provisions of this Section 35 shall survive
the exercise, exchange, redemption or expiration of the Rights and the
termination or expiration of this Agreement.
-59-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
EXPRESSJET HOLDINGS, INC.
Attest:
By: By:
-------------------------------- -------------------------------------
βββββ β. ββββββββ βββββ β. ββββ
Secretary Chief Executive Officer
MELLON INVESTOR SERVICES LLC,
as Rights Agent
Attest:
By: By:
-------------------------------- -------------------------------------
Name: Name:
------------------------------ -----------------------------------
Title: Title:
----------------------------- ----------------------------------
CONTINENTAL AIRLINES, INC.
(with respect to Sections 27, 29 and 35)
Attest:
By: By:
-------------------------------- -------------------------------------
Name: Name:
------------------------------ -----------------------------------
Title: Title:
----------------------------- ----------------------------------
[Signature Page to Rights Agreement]
-60-
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
EXPRESSJET HOLDINGS, INC.
---------
(Pursuant to Section 151 of the
Delaware General Corporation Law)
---------
ExpressJet Holdings, Inc., a Delaware corporation (the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the Delaware General
Corporation Law at a meeting duly called and held on ______________, 2001:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Restated
Certificate of Incorporation of the Corporation (the "Restated Certificate of
Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Section 1. Designation and Amount. The shares of this series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 100,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount (if any) per share (rounded to the
nearest cent), subject to the provision for adjustment hereinafter set forth,
equal to 1000 times the aggregate per share amount of all cash dividends, and
1000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Corporation
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
(C) Dividends due pursuant to paragraph (A) of this Section
shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at
A-2
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of votes entitled to be cast by the holders of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of votes entitled to be cast by the holders of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided in the Restated Certificate
of Incorporation, including any other Certificate of Designation creating a
series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, or as otherwise required by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
A-3
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. The
Corporation shall take all such actions as are necessary to cause all such
shares to become authorized but unissued shares of Preferred Stock that may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein or in the Restated Certificate of
Incorporation, including any Certificate of Designation creating a series of
Preferred Stock or any similar stock, or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, the holders of shares
of Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of shares
of Common Stock plus an amount equal to any accrued and unpaid dividends. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
A-4
changed or exchanged. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. Amendment. The Restated Certificate of Incorporation shall
not be amended in any manner, including in a merger or consolidation, which
would alter, change, or repeal the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and upon liquidation, dissolution and winding up,
junior to all series of Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its duly authorized officer this ______ day of
_____________, 2002.
EXPRESSJET HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
A-5
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
--------------
NOT EXERCISABLE AFTER SEPTEMBER 12, 2011 OR EARLIER
IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT (AS DEFINED HEREIN). UNDER CERTAIN
CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
EXPRESSJET HOLDINGS, INC.
This certifies that _______________________ , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended and Restated Rights Agreement, dated as of _________________, 2002
(the "Rights Agreement"), between ExpressJet Holdings, Inc., a Delaware
corporation (the "Company"), Mellon Investor Services LLC (the "Rights Agent")
and Continental Airlines, Inc., to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to the earliest of (i) 5:00 P.M., central time, on September 12, 2011,
(ii) the Redemption Date (as such term is defined in the Rights Agreement), or
(iii) the time at which such Rights are exchanged pursuant to Section 24 of the
Rights Agreement, at the office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.01 per share
("Preferred Shares"), of the Company, at a purchase price of $80.00 per one
one-thousandth of a Preferred Share (the "Exercise Price"), upon presentation
and surrender of this Right Certificate with the certification and the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Exercise Price
set forth above, are the number and Exercise Price as of September 12, 2001,
based on the Preferred Shares as constituted at such date. As provided in the
Rights Agreement, the
Exercise Price and the number of one one-thousandths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
From and after the occurrence of an event described in Section
11(a)(ii) of the Rights Agreement, if the Rights are or were at any time on or
after the earlier of (x) the date of such event and (y) the Distribution Date
(as such term is defined in the Rights Agreement) acquired or beneficially owned
by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as
such terms are defined in the Rights Agreement), such Rights shall become void,
and any holder of such Rights shall thereafter have no right to exercise such
Rights.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the office of the Rights Agent and will be mailed to the holder of
the Right Certificates, without charge, after receipt of a written request
therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, at the Company's
option, the Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $.001 per Right or (ii) may be exchanged in
whole or in part for shares of the Company's Common Stock, par value $.01 per
share, or Preferred Shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of
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directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be 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.
Dated as of .
-------------------------
EXPRESSJET HOLDINGS, INC.
Attest:
By:
-------------------------------------- ---------------------------------
Name: Name:
Title: Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
Rights Agent
By:
---------------------------
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
------------ ----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
---------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
---------------------------------------
B-4
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: EXPRESSJET HOLDINGS, INC.:
The undersigned hereby irrevocably elects to exercise
______________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------
-------------------------------------------------------------
Dated: ,
------------ ----
-------------------------------
Signature
Signature Guaranteed:
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Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
---------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
---------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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