EXHIBIT 99.2
___________________________________________________________
ASPECT DEVELOPMENT, INC.
and
U. S. STOCK TRANSFER CORPORATION,
AS RIGHTS AGENT
Rights Agreement
Dated as of October 7, 1998
___________________________________________________________
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions................................................................................ 1
Section 2. Appointment of Rights Agent........................................................................ 5
Section 3. Issue of Right Certificates........................................................................ 5
Section 4. Form of Right Certificates......................................................................... 7
Section 5. Countersignature and Registration.................................................................. 8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.......................................................................... 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................... 10
Section 8. Cancellation and Destruction of Right Certificates................................................. 11
Section 9. Availability of Preferred Shares................................................................... 12
Section 10. Preferred Shares Record Date....................................................................... 13
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights................................. 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......................................... 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................... 22
Section 14. Fractional Rights and Fractional Shares............................................................ 26
Section 15. Rights of Action................................................................................... 27
Section 16. Agreement of Right Holders......................................................................... 28
Section 17. Right Certificate Holder Not Deemed a Stockholder.................................................. 28
Section 18. Concerning the Rights Agent........................................................................ 29
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......................................... 29
Section 20. Duties of Rights Agent............................................................................. 30
Section 21. Change of Rights Agent............................................................................. 32
Section 22. Issuance of New Right Certificates................................................................. 33
Section 23. Redemption......................................................................................... 34
Section 24. Exchange........................................................................................... 35
Section 25. Notice of Certain Events........................................................................... 38
Section 26. Notices............................................................................................ 38
Section 27. Supplements and Amendments......................................................................... 39
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 28. Determination and Actions by the Board of Directors, etc........................................... 40
Section 29. Successors......................................................................................... 40
Section 30. Benefits of this Agreement......................................................................... 40
Section 31. Severability....................................................................................... 40
Section 32. Governing Law...................................................................................... 40
Section 33. Counterparts....................................................................................... 41
Section 34. Descriptive Headings............................................................................... 41
Exhibit A - Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
ii.
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT ("AGREEMENT"), dated as of October 7, 1998,
between ASPECT DEVELOPMENT, INC., a Delaware corporation (the "Company"), and U.
S. STOCK TRANSFER CORPORATION ("Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as such term is hereinafter defined) outstanding at the close of business on
October 22, 1998 (the "Record Date"), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as such term is hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest to occur of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the
Common Shares then outstanding. Notwithstanding the
foregoing, (A) the term Acquiring Person shall not include
(i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee
benefit or compensation 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
benefit or compensation plan, or (v) an Excluded Person (as
such term is hereinafter defined) and (B) no Person shall
become an "Acquiring Person" either (x) as the result of an
acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Shares then
outstanding; provided, however, that if a Person shall
if a Person shall become the Beneficial Owner of 15% or more
of the Common Shares then outstanding by reason of share
purchases by the Company and shall, following written notice
from, or public disclosure by the Company of such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares without the prior consent of the
Company
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and shall then Beneficially Own more than 15% of the Common
Shares then outstanding, then such Person shall be deemed to
be an "Acquiring Person," or (y) as a result of the
acquisition of Common Shares directly from the Company,
provided, however, that if a Person shall become the
Beneficial Owner of 15% (30% in the case of an Excluded
Person) or more of the Common Shares then outstanding by
reason of share purchases directly from the Company and
shall, after that date, become Beneficial owner of any
additional Common Shares without the prior written consent
of the Company and shall then Beneficially Own more than
15% (30% in the case of an Excluded Person) of the Common
Shares then outstanding, then such Person shall be deemed
to be an "Acquiring Person" or (z) if the Board of
Directors determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests, as promptly as
practicable (as determined in good faith by the Board of
Directors), but in any event within five Business Days,
following receipt of written notice from the Company of
such event, of Beneficial Ownership of a sufficient number
of Common Shares so that such Person would no longer be an
Acquiring Person, as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall
not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement; provided, however, that the
limited partners of a limited partnership shall not be
deemed to be Associates of such limited partnership solely
by virtue of their limited partnership interests.
(c) 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 is deemed to beneficially own, within
the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on
the date of this Rights Agreement ;
(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 of time) 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), or upon the exercise of
conversion rights, exchange rights, rights
2
(other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, 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 13D
under the Exchange Act (or any comparable or
successor report); 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) for the purpose of
acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)
hereof) or disposing of any securities of the Company;
provided, however, an agreement, arrangement or
understanding for purposes of this Section 1(c)(iii)
shall not be deemed to include actions, including any
agreement, arrangement or understanding, or statements
by any member of the Company's Board of Directors on
the date of this Agreement, any subsequent directors
of the Company (the "Successor Directors") who have
been nominated by a majority of directors who are
directors as of the date of this Agreement or who are
Successor Directors, or by any Person of whom such a
director is an Affiliate or Associate, provided,
however, that this exception shall not apply to a
particular Person or Persons if and to the extent that
such Person or Persons, after the date of this
Agreement, acquires Beneficial Ownership of more than
an additional 5% of the then outstanding Common Shares
of the Company unless (A) the shares are acquired
directly from the Company or as part of an employee
benefit or compensation plan of the Company or a
subsidiary of the Company or (b) the Person
establishes to the satisfaction of the directors of
the Company that it is acting on its own behalf and
not in concert with any other Person and will not,
upon completion of any purchases, be the Beneficial
Owner of 15% or more of the outstanding Common Shares.
3
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.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State
of California are authorized or obligated by law or executive
order to close.
(e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Pacific Time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., Pacific
Time, on the next succeeding Business Day.
(f) "COMMON SHARES" shall mean the shares of common stock, par
value $.001 per share, of the Company; provided, however,
that, "Common Shares," when used in this Agreement in
connection with a specific reference to any Person other than
the Company, shall mean the capital stock (or equity
interest) with the 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.
(g) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3 hereof.
(h) "EXCLUDED STOCKHOLDER" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (including
his Affiliates and Associates); provided, however, that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (including his Affiliates and Associates)
shall not be an Excluded Stockholder if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(including his Affiliates and Associates) becomes the
Beneficial Owner of more than 30% of the outstanding Common
Shares without the prior approval of the Board of Directors
of the Company.
(i) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7 hereof.
(j) "INTERESTED STOCKHOLDER" shall mean any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or any
other Person in which any such Acquiring Person, Affiliate or
Associate has an interest, or any other Person acting
directly or indirectly on behalf of or in concert with any
such Acquiring Person, Affiliate or Associate.
(k) "PERSON" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(l) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of
the Company having the
4
designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions set forth in the
Form of Certificate of Designation attached to this Agreement
as Exhibit A.
(m) "PURCHASE PRICE" shall have the meaning set forth in Section
7(b) hereof.
(n) "REDEMPTION DATE" shall have the meaning set forth in
Section 7 hereof.
(o) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such provided, however
that, if such Person is determined not to have become an
Acquiring Person pursuant to clause (z) of Subsection 1(a)(B)
hereof, then no Shares Acquisition Date shall be deemed to
have occurred.
(p) "SUBSIDIARY" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned,
directly or indirectly, by such Person.
(q) "TRANSACTION" shall mean any merger, consolidation or sale
of assets described in Section 13(a) hereof or any
acquisition of Common Shares which would result in a Person
becoming an Acquiring Person or a Principal Party (as such
term is hereinafter defined).
(r) "TRANSACTION PERSON" with respect to a Transaction shall
mean (i) any Person who (x) is or will become an Acquiring
Person or a Principal Party (as such term is hereinafter
defined) if the Transaction were to be consummated and (y)
directly or indirectly proposed or nominated a director of
the Company which director is in office at the time of
consideration of the Transaction, or (ii) an Affiliate or
Associate of such a Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) 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 (determined in accordance with Rule
14d-2 under the Exchange Act) by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or
any entity holding
5
Common Shares for or pursuant to the terms of any such plan)
of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer (which intention to commence remains
in effect for five Business Days after such announcement),
the consummation of which would result in any Person becoming
an Acquiring Person (including any such date which is after
the date of this Agreement and prior to the issuance of the
Rights, the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced by
the certificates for Common Shares registered in the names of
the holders thereof (which certificates shall also be deemed
to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights (and the right to receive
Right Certificates therefor) will be transferable only in
connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, 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, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held, subject to the adjustment provisions of
Section 11 of this Rights Agreement. As of the Distribution
Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send (directly or through the Rights Agent
or its transfer agent) a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the
names of the holders thereof. Until the Distribution Date (or
the earlier of the Redemption Date and the Final Expiration
Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(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 Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final
6
Expiration Date shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between Aspect Development, Inc. (the
"Company") and U.S. Stock Transfer Corporation as Rights
Agent (the "Rights Agent"), dated as of October 7,
1998, as amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights
Agreement) and certain related persons, whether
currently held by or on behalf of such Person or by any
subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing
legend, until 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 Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding. Notwithstanding this Section 3(c), the omission
of a legend shall not affect the enforceability of any part
of this Rights Agreement or the rights of any holder of the
Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the form of election to purchase
Preferred Shares, the form of assignment and the form of
certification to be printed on the reverse thereof) shall 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 and as are not inconsistent with the
provisions of this
7
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 provisions of Sections 7,11
and 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths
of a Preferred Share as shall be set forth therein at the
price per one one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and
void pursuant to Section 11(a)(ii) hereof and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby are null and void.
The provisions of Section 11(a)(ii) hereof shall be operative
whether or not the foregoing legend is contained on any such
Right Certificate.
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, its Vice Chairman of the
Board, its Chief Financial Officer, or any of its Vice Presidents,
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 an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless 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, nevertheless, may 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 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
8
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, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, books for
registration and 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. Subject to
the provisions of Section 11(a)(ii), Section 14 and Section 24
hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates 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-hundredths 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 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 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 shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 11(a)(ii), Section 14 and Section 24 hereof,
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 to
cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably 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 reasonably satisfactory to
them, and, at the Company'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 issue, execute and
deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered holder in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
9
Notwithstanding any other provisions hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced
by Rights Certificates.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share (or such other number of shares or other
securities) as to which the Rights are exercised, at or prior
to the earliest of (i) the Close of Business on October 7,
2008 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof.
(b) The purchase price (the "Purchase Price") for each one
one-hundredth of a Preferred Share pursuant to the exercise
of a Right shall initially be $187.50 and 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 duly executed,
accompanied by payment of the Purchase Price for the shares
to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check, bank draft or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent for the
Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests, or (B) if the Company, in its sole discretion,
shall have elected to deposit the Preferred Shares issuable
upon exercise of the Rights hereunder into a depository,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths 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 the depositary agent to comply
with such request, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary
10
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 appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated
to issue securities of the Company other than Preferred
Shares (including Common Shares) of the Company pursuant to
Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii) hereof, the Rights Agent
shall return such Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Right Certificate
no longer include the rights provided by Section 11(a)(ii)
hereof, and, if fewer than all the Rights represented by such
Right Certificate were so exercised, the Rights Agent shall
indicate on the Right Certificate the number of Rights
represented thereby which continue to include the rights
provided by Section 11(a)(ii) hereof.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section
14 hereof.
(e) 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 this Section 7.
(f) 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)
completed and signed the certification following the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably
request.
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
11
to the Rights Agent for cancellation or in canceled form, or, if
delivered or 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 any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall, 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. AVAILABILITY OF PREFERRED SHARES. The Company covenants and
agrees that so long as the Preferred Shares (and, after the time a
person becomes an Acquiring Person, Common Shares or any other
securities) issuable upon the exercise of the Rights may be listed
on any national securities exchange or quotation system, the Company
shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange or quotation system upon official notice
of issuance upon such exercise.
The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (or Common
Shares and other securities, as the case may be) delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares or other securities.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and 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
transfer tax 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 shall have been paid (any such tax 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 is due.
As soon as practicable after the Shares Acquisition Date, the
Company shall use its best efforts to:
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect
to the Rights and the securities purchasable upon exercise of
the Rights on an
12
appropriate form, will use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and will use its best efforts
to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of
the Act) until the Final Expiration Date; and
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdictions as may be necessary
or appropriate.
SECTION 10. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares or other securities is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares or other
securities represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered with the forms of election and
certification duly executed and payment of the Purchase Price (and
any applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Shares or other securities transfer books of the Company
are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Shares or other
securities transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, 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 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 PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.
The Purchase 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),
13
the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of
such subdivision, combination or reclassification, and
the number and kind of shares of capital stock
issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification;
provided, however, that in no event shall the
consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon
exercise of one Right. If an event occurs which would
require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and
shall be made prior to any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof and the provisions of
the next paragraph of this Section 11(a)(ii), in the
event any Person shall become an Acquiring Person,
each holder of a Right shall, for a period of 60 days
after the later of such time any Person becomes an
Acquiring Person or the effective date of an
appropriate registration statement under the Act
pursuant to Section 9 hereof (provided, however that,
if at any time prior to the expiration or termination
of the Rights there shall be a temporary restraining
order, a preliminary injunction, an injunction, or
temporary suspension by the Board of Directors, or
similar obstacle to exercise of the Rights (the
"Injunction") which prevents exercise of the Rights, a
new 60-day period shall commence on the date the
Injunction is removed), have a right to receive, upon
exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number
of Common Shares as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the
number of one one-hundredths 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 (determined pursuant
to Section 11(d) hereof) on the date such Person
became an Acquiring Person; provided, however, that if
the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions
of Section 13 hereof, then only the
14
provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section
11(a)(ii). 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
which would eliminate or diminish the benefits
intended to be afforded by the Rights.
Notwithstanding anything in this Agreement to the
contrary, from and after the time any Person becomes
an Acquiring Person, any Rights beneficially owned by
(i) such Acquiring Person or an Associate or Affiliate
of such Acquiring Person, (ii) a transferee of such
Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the
Acquiring Person became such, or (iii) a transferee of
such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person's becoming such
and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section
11(a)(ii), shall become null and void without any
further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable
efforts to insure that the provisions of this Section
11(a)(ii) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Right
Certificates or other Person as a result of its
failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or
transferees hereunder. No Right Certificate shall be
issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a
majority of the Board of Directors then in office
determines that such action is necessary or
appropriate and not contrary to the interests of
holders of Rights,
15
elect to (and, in the event that the Board of
Directors has not exercised the exchange right
contained in Section 24(c) hereof and there are not
sufficient treasury shares and authorized but unissued
Common Shares to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph
(ii), the Company shall) take all such action as may
be necessary to authorize, issue or pay, upon the
exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, Common
Shares, other securities or any combination thereof
having an aggregate value equal to the value of the
Common Shares which otherwise would have been issuable
pursuant to Section 11(a)(ii) hereof, which aggregate
value shall be determined by a nationally recognized
investment banking firm selected by a majority of the
Board of Directors then in office. For purposes of the
preceding sentence, the value of the Common Shares
shall be determined pursuant to Section 11(d) hereof.
Any such election by the Board of Directors must be
made within 60 days following the date on which the
event described in Section 11(a)(ii) hereof shall have
occurred. Following the occurrence of the event
described in Section 11(a)(ii) hereof, a majority of
the Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to 60
days following the date on which the event described
in Section 11(a)(ii) hereof shall have occurred to the
extent that such directors have not determined whether
to exercise their rights of election under this
Section 11(a)(iii). In the event of any such
suspension, the Company shall issue a public
announcement stating that the exercisability of the
Rights has been temporarily suspended.
(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 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same
designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions 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 such term is hereinafter defined) on
such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred
16
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 of the Company, whose
determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the
account of the Company 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 warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of 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 Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (as
such term is hereinafter defined) on such record date, less
the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of
the portion of the 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 Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such
record date had not been fixed.
17
(d)
(i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i))
on any date shall be deemed to be the average of the
daily closing prices per share of such Security for
the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current
per share market price of the Security is determined
during a period following the announcement by the
issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of
such Security or securities convertible into such
shares, or (B) any subdivision, combination or
reclassification of such Security or securities
convertible into such shares, or (C) any subdivision,
combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the
current per share market price shall be appropriately
adjusted to reflect the current market price per share
equivalent of such Security. The closing price for
each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed
or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction
reporting system with respect to securities listed on
the principal national securities exchange on which
the Security is listed or admitted to trading or as
reported on the Nasdaq National Market or, if the
Security is not listed or admitted to trading on any
national securities exchange or reported on the Nasdaq
National Market, the last quoted price or, if not so
quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc.
Automated Quotations System ("Nasdaq") or such other
system then in use, or, if on any such date the
Security is not quoted by any such organization, the
average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the Security selected by the Board of
Directors of the Company or, if on any such date no
professional market maker is making a market in the
Security, the price as determined in good faith 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 for the
18
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) hereof. 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) hereof (appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof)
multiplied by one hundred. 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 of the Company,
whose determination shall be described in a statement
filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one one-hundredth of a Preferred Share or one ten-
thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date
of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock
of the Company other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Preferred Shares contained
in Sections 11(a) through 11(c) hereof, inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Shares shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a
19
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) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in
Section 11(b) and Section 11(c) hereof, each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-
hundredths of a Preferred Share (calculated to the nearest
one one-millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of one one-hundredths of a
Preferred Share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-
hundredths of a Preferred Share purchasable upon the exercise
of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for
the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued,
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
so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in
20
the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue
to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the
then par value, if any, 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 nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to
defer 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 on the basis of
the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing
such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or
if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially
diminish or eliminate the benefits intended to be afforded by
the Rights. Any such action taken by the Company during any
period after any Person becomes an Acquiring Person but prior
to the Distribution Date shall be null and void unless such
action could be taken under this Section 11(m) from and after
the Distribution Date.
(n) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in
its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at
less than the current market price, issuance wholly for cash
of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares,
21
dividends on Preferred Shares payable in Preferred Shares or
issuance of 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.
(o) 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 than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (A) the number of one
one-hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of which is the number of Common
Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such
event, and (B) 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(o) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) hereof shall only result in
the loss of rights under Section 11(a)(ii) hereof to the extent so
exercised and shall not otherwise affect the rights represented by the
Rights under this Agreement, including the rights represented by Section 13
hereof.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Shares or the Preferred
Shares a copy of such certificate and (c) 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 deemed to have knowledge of any
adjustment unless and until it shall have received such
certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Shares Acquisition Date or,
if a Transaction is proposed, the Distribution Date, directly
or indirectly (x) the Company shall consolidate with, or
merge with and into, any
22
Interested Stockholder, or if in such merger or consolidation
all holders of Common Stock are not treated alike, any other
Person, (y) any Interested Person, or if in such merger or
consolidation all holders of Common Stock are not treated
alike, any other 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 (other
than, in the case of either transaction described in (x) or
(y), a merger or consolidation which would result in all of
the voting power represented by the securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
securities of the surviving entity) all of the voting power
represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z)
the Company shall sell, mortgage or otherwise transfer (or
one or more of its subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its subsidiaries (taken as a
whole) to any Interested Stockholder or Stockholders, or if
in such transaction all holders of Common Stock are not
treated alike, any other Person, (other than the Company or
any Subsidiary of the Company in one or more transactions
each of which individually and the aggregate does not violate
Section 13(d) hereof) then, and in each such case, proper
provision shall be made so that (i) each holder of a Right,
subject to Section 11(a)(ii) hereof, shall have the right to
receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of freely
tradable Common Shares of the Principal Party (as such term
is hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims,
as shall be equal to the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (B) 50% of the then current per
share market price of the Common Shares of such Principal
Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party 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 Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of shares of its Common Shares
23
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 its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a)
hereof, the Person that is the issuer of any
securities into which Common Shares are converted in
such merger or consolidation, and if no securities are
so issued, the Person that is the other party to the
merger or consolidation (or, if applicable, the
Company, if it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any case, (1) if the Common
Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary or Affiliate of another Person
the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; (2) if
such Person is a subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two
or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market
value; and (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in such
joint venture as if such party were a "subsidiary" of both or
all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized Common Shares that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and each
Principal Party and each other Person who may become a
Principal Party as a result of such consolidation, merger,
sale or transfer shall have (i) executed and
24
delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b)
of this Section 13 and (ii) prepared, filed and had declared
and remain effective a registration statement under the Act
on the appropriate form with respect to the Rights and the
securities exercisable upon exercise of the Rights and
further providing that, as soon as practicable after the date
of any consolidation, merger, sale or transfer of assets
mentioned in paragraph (a) of this Section 13, the Principal
Party at its own expense will:
(i) cause the registration statement under the Act with
respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form to
remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of
the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate;
(iii) list the Rights and the securities purchasable upon
exercise of the Rights on each national securities
exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or on
the Nasdaq National Market if the Common Shares were
listed on the Nasdaq National Market or, if the Common
Shares were not listed on a national securities
exchange or the Nasdaq National Market prior to the
consummation of the Business Combination, on a
national securities exchange or the Nasdaq National
Market; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its
Affiliates which comply in all material respects with
the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
(d) After the Distribution Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge
with or into, or (iii) sell or transfer to, in one or more
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
subsidiaries taken as a whole, any other Person (other than a
Subsidiary of the Company in a transaction which does not
violate Section 11(m) hereof), if (x) at the time of or after
such consolidation, merger or sale there are any charter or
bylaw provisions or any rights, warrants or other instruments
or securities outstanding, agreements in effect or any other
action taken which would diminish or otherwise eliminate the
benefits
25
intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any
of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this
Section 13(d).
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 as reported on the Nasdaq National
Market or, if the Rights are not listed or admitted to
trading on any national securities exchange or reported on
the Nasdaq National Market, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by 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 of the Company. 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 of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are
26
integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples
of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts;
provided, however, that holders of such depositary receipts
shall have all of the designations and the powers,
preferences and rights, and the qualifications, limitations
and restrictions 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-hundredth of a Preferred Share,
the Company shall pay to the registered holders 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. For the purposes
of this Section 14(b), the current market value of a
Preferred Share shall be the current per share market price
of the Preferred Shares (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 (or, if not
publicly traded, in accordance with Section 11(d)(ii)
hereof).
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the
right to receive Common Shares, capital stock equivalents
(other than Preferred Shares) or other securities upon the
exercise of a Right, the Company shall not be required to
issue fractions of Common Shares or units of such Common
Shares, capital stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which
evidence fractional Common Shares, capital stock equivalents
or other securities. In lieu of fractional Common Shares,
capital stock equivalents or other securities, the Company
shall pay to the registered holders 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 Common Share or unit of such Common
Shares, capital stock equivalents or other securities. For
purposes of this Section 14(c), the current market value
shall be the current per share market price (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital
stock equivalent shall have the value of one one-hundredth of
a Preferred Share.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right (except as
provided above).
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 Sections 18 and 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
27
Common Shares), 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), may, in 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 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. Holders of
Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys fees, incurred by them in any action
to enforce the provisions of 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 (subject to the provisions of this Rights
Agreement) only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer;
and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any
notice to the contrary.
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
28
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 and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises. The indemnity provided
herein shall survive the expiration of the Rights and the
termination of this Agreement.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement 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. In no case will the Rights Agent be liable for special,
indirect, incidental or consequential or consequential loss or
damage at any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of such loss or
damage.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the shareholder services or corporate
trust 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
corporation 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;
29
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 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 imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its
choice (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such 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 or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, the Chief
Financial Officer, any Vice President, 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 for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith
or willful misconduct.
(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.
30
(e) The Rights Agent shall not 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 be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3,
11, 13, 23 or 24 hereof, or the ascertaining of the existence
of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate pursuant to
Section 12 hereof describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when 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 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
Financial Officer, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect to its
duties or obligations under this Agreement and the date on
and/or after which such action shall be taken or omitted and
the Rights Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such
application on or after the date specified therein (which
date shall not be less than three business days after the
date indicated in such application unless any such officer
shall have consented in writing to an earlier date) unless,
prior to taking or omitting any such action, the Rights Agent
has received written instructions in response to such
application specifying the action to be taken or omitted.
31
(h) The Rights Agent and any stockholder, 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 legal entity.
(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 resulting from any
such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Right 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 executed, the
Rights Agent shall not take any further action with respect
to such requested exercise of 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 30 days' notice in writing mailed to the Company and
to each transfer agent for the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent for the Common Shares
or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
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
32
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
be either (a) a corporation business trust or limited liability
company organized and doing business under the laws of the United
States or of any other state of the United States which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) a direct or indirect wholly owned
subsidiary of such an entity or its wholly-owning parent. After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and
each transfer agent for the Common Shares or 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 Purchase 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 Final
Expiration Date, the Company (a) shall with respect to Common
Shares so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement in existence prior to the
Distribution Date, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company and in
existence prior to the Distribution Date, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) the Company shall not be
obligated to issue any such Right Certificates if, and to the
extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right
Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
33
SECTION 23. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to Section 23(b) hereof and shall not be
redeemed in any other manner.
(b)
(i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of such time
as any Person becoming an Acquiring Person or the
Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption
price of $0.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Price"), and the Company may, at its
option, pay the Redemption Price in Common Shares
(based on the "current per-share market price," as
such term is defined in Section 11(d) hereof, of the
Common Shares at the time of redemption), cash or any
other form of consideration deemed appropriate by the
Board of Directors. 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. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) hereof prior
to the expiration or termination of the Company's
right of redemption under this Section 23(b)(i).
(ii) In addition, the Board of Directors of the Company
may, at its option, at any time after the time a
Person becomes an Acquiring Person and the expiration
of any period during which the holder of Rights may
exercise the rights under Section 11(a)(ii) hereof but
prior to any event described in clause (x), (y) or (z)
of the first sentence of Section 13 hereof, redeem all
but not less than all of the then outstanding Rights
at the Redemption Price (x) in connection with any
merger, consolidation or sale or other transfer (in
one transaction or in a series of related
transactions) of assets or earning power aggregating
50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) in
which all holders of Common Shares are treated alike
and not involving (other than as a holder of Common
Shares being treated like all other such holders) an
Interested Stockholder or a Transaction Person or
(y)(A) if and for so long as the Acquiring Person is
not thereafter the Beneficial Owner of 15% or more of
the then outstanding Common Shares, and (B) at the
time of redemption no other Persons are Acquiring
Persons.
34
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to
Section 23(b) hereof, 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 give public notice of any such redemption;
provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to
Section 23(b) hereof, 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, provided, however, that failure to give, or any
defect in, any such notice shall not affect the validity of
such redemption. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption
will 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, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
(d) The Company may, at its option, discharge all of its
obligations with respect to any redemption of the Rights by
(i) issuing a press release announcing the manner of
redemption of the Rights and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at
their last addresses as they appear on 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,
and upon such action, all outstanding Right Certificates
shall be null and void without any further action by the
Company.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company 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 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
35
Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to
Section 24(a) hereof 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; provided, however, that the
failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of 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 lieu of issuing Common Shares in accordance with Section
24(a) hereof, the Company may, if a majority of the Board of
Directors then in office determines that such action is
necessary or appropriate and not contrary to the interests of
the holders of Rights, elect to (and, in the event that there
are not sufficient treasury shares and authorized but
unissued Common Shares to permit any exchange of the Rights
in accordance with Section 24(a) hereof, the Company shall)
take all such action as may be necessary to authorize, issue
or pay, upon the exchange of the Rights, cash (including by
way of a reduction of the Purchase Price), property, Common
Shares, other securities or any combination thereof having an
aggregate value equal to the value of the Common Shares which
otherwise would have been issuable pursuant to Section 24(a)
hereof, which aggregate value shall be determined by a
nationally recognized investment banking firm selected by a
majority of the Board of Directors then in office. For
purposes of the preceding sentence, the value of the Common
Shares shall be determined pursuant to Section 11(d) hereof.
Any election pursuant to this Section 24(c) by the Board of
Directors must be made within 60 days following the date on
which the event described in Section
36
11(a)(ii) hereof shall have occurred. Following the
occurrence on the event described in Section 11(a)(ii)
hereof, a majority of the Board of Directors then in office
may suspend the exercisability of the Rights for a period of
up to 60 days following the date on which the event described
in Section 11(a)(ii) hereof shall have occurred to the extent
that such directors have not determined whether to exercise
their rights of election under this Section 24(c). In the
event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended.
(d) 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 market value of a
whole Common Share. For the purposes of this Section 24(d),
the current 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 after the date of the first public
announcement by the Company that an exchange is to be
effected pursuant to this Section 24.
(e) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exchange of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary
receipts; provided, however, that holders of such depositary
receipts shall have all of the designations and the powers,
preferences and rights, and the qualifications, limitations
and restrictions 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-hundredth of a Preferred Share,
the Company shall pay to the registered holders 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. For the purposes
of this Section 24(e), the current market value of a
Preferred Share shall be one hundred (100) times 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 after the date of the first public announcement
by the Company that an exchange is to be effected pursuant to
this Section 24.
37
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall 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 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 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 purpose 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 the 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 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 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 the Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence
of such event, which notice shall describe the event and the
consequences of the 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
38
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Aspect Development, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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 sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
U. S. Stock Transfer Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Customer Service
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. Prior to the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the
approval of any holders of the Rights. From and after the
Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, from time to time supplement or amend any
provision of this Agreement without the approval of any holders of
Right Certificates in order to (i) cure any ambiguity, (ii) correct
or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or (iii) change
any other provisions with respect to the Rights which the Company
may deem necessary or desirable; provided, however, that no such
supplement or amendment shall be made which would adversely affect
the interests of the holders of Rights (other than the interests of
an Acquiring Person or its Affiliates or Associates). Any
supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date
shall become null and void unless such supplement or amendment
could have been adopted by the Company from and after the
Distribution Date. Any such supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent.
Upon delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment unless the Rights Agent
shall have
39
determined in good faith that such supplement or amendment would
adversely affect its interest under this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common
Shares.
SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For
all purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board,
or the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation, the
right and power to (i) interpret the provisions of this Agreement,
and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Rights Agent and the holders of the Rights, and (y) not subject the
Board to any liability to the holders of the Rights.
SECTION 29. 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 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
SECTION 31. 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 32. 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
40
of such State applicable to contracts to be made and performed
entirely within such State.
SECTION 33. 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 34. 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.
41
IN WITNESS WHEREOF, parties whereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
ATTEST: ASPECT DEVELOPMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------- --------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------- ------------------------
Title: Corporate Secretary Title: Vice President and Chief
-------------------------- ----------------------------
Financial Officer
-----------------
ATTEST: U. S. STOCK TRANSFER CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- --------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- ------------------------
Title: Senior Vice President Title: Vice President
-------------------------- -----------------------------
42
ASPECT DEVELOPMENT, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
(EXHIBIT C TO RIGHTS PLAN)
On September 1, 1998 the Board of Directors of ASPECT DEVELOPMENT, INC.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.001 per share
(the "Common Shares"), of the Company. The dividend is effective as of October
22, 1998 (the "Record Date") with respect to the stockholders of record on
that date. The Rights will also attach to new Common Shares issued after the
Record Date. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of a Series A Junior Participating
Preferred Stock, par value $.001 per share (the "Preferred Shares"), of the
Company at a price of $187.50 per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. Each Preferred Share is designed to
be the economic equivalent of 100 Common Shares. The description and terms of
the Rights are set forth in a Rights Agreement dated as of October 7, 1998
(the "Rights Agreement"), between the Company and the U.S. Stock Transfer
Corporation (the "Rights Agreement").
DETACHMENT AND TRANSFER OF RIGHTS
Initially, the Rights will be evidenced by the stock certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. Until the earlier to occur of (i) a public
announcement that a person or group of affiliated or associated persons, has
become an "Acquiring Person" (as such term is defined in the Rights
Agreement) or (ii) 10 business days (or such later date as the Board may
determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer which would result in the
beneficial ownership by an Acquiring Person of 15% or more of the outstanding
Common Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such Common Share
certificate. In general, an "Acquiring Person" is a person, the affiliates or
associates of such person, or a group, which has acquired beneficial ownership
of 15% or more of the outstanding Common Shares provided that certain
-------------
"Excluded Stockholders" as defined in the Rights Agreement may have greater
beneficial ownership without becoming an "Acquiring Person."
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferable with and only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights) the surrender or transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of
this summary or Rights being attached thereto, will also constitute the
transfer of the
1.
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.
EXERCISABILITY OF RIGHTS
The Rights are not exercisable until the Distribution Date. The Rights
will expire on October 7, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable or payable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution. The number of
outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares, or subdivisions, consolidations or combinations
of the Common Shares occurring, in any such case, prior to the Distribution
Date. With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
TERMS OF PREFERRED SHARES
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to
a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary anti-dilution provisions. Because of the
nature of the Preferred Shares' dividend, liquidation and voting rights, the
value of the one one-hundredth interest in a Preferred Shares purchasable upon
exercise of each Right should approximate the value of one Common Share. The
Preferred Shares would rank junior to any other series of the Company's
preferred stock.
2.
TRIGGER OF FLIP-IN AND FLIP-OVER RIGHTS
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person or any affiliate or associate thereof (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of the Right.
This right will commence on the date of public announcement that a person has
become an Acquiring Person (or the effective date of a registration statement
relating to distribution of the rights, if later) and terminate 60 days later
(subject to adjustment in the event exercise of the rights is enjoined).
In the event that the Company is acquired in a merger or other business
combination transaction of 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person, its affiliates or associates or certain
other persons in which such persons have an interest, proper provision will be
made so that each such holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the
exercise price of the Right.
REDEMPTION AND EXCHANGE OF RIGHTS
At any time prior to the earliest of (i) the close of business on the
day of the first public announcement that a person has become an Acquiring
Person, or (ii) the Final Expiration Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $0.001
per Right (the "Redemption Price"). In general, the redemption of the Rights
may be made effective at such time on such basis with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
At any time after any Person becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Common Share, or, under
circumstances set forth in the Rights Agreement, cash, property or other
securities of the Company, including fractions of a Preferred Share (or of a
share of a class or series of the Company's preferred stock having equivalent
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions), per Right (with value equal to such Common
Shares).
AMENDMENT OF RIGHTS
The terms of the Rights generally may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
except that from and after such time as the Rights are distributed no such
amendment may adversely affect the interests of the holders of the Rights
(excluding the interest of any Acquiring Person).
3.
ADDITIONAL INFORMATION
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated
October 13, 1998. A copy of the Rights Agreement is available from the Company
by writing to: Aspect Development, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investor Relations. This summary description of
the Rights is not intended to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
4.