1
EXHIBIT "4"
ONYX ACCEPTANCE CORPORATION
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
(RIGHTS AGENT)
RIGHTS AGREEMENT
DATED AS OF JULY 8, 1997
8.
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Reservation and Availability of Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . . . . 14
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 . . . . . . . . . . . . . . . . . . . 23
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
i.
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Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 29. Determinations and Actions by the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
EXHIBITS
Exhibit A - Form of Certificate of Designation for Series A Participating
Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
ii.
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of July 8, 1997, between Onyx Acceptance Corporation, a Delaware
corporation (the "Company"), and American Stock Transfer and Trust Company, a
New York banking corporation (the "Rights Agent").
WHEREAS, effective July 8, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors authorized and declared a
distribution of one Right (each, a "Right") for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the Close of Business (as
hereinafter defined) on July 21, 1997 (the "Record Date"), each Right initially
representing the right to purchase one one- thousandth of a share (a "Unit") of
Preferred Stock (as 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 share of Common Stock that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date (as such terms are
hereinafter defined).
NOW, THEREFORE, 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
shares of Common Stock of the Company then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan. Notwithstanding the foregoing:
(i) No Person shall become an "Acquiring Person" as the
result of an acquisition of shares of Common Stock 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 shares of Common Stock of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock of the
Company, then such Person shall be deemed to be an "Acquiring Person"
thereunder; and
(ii) if the Board of Directors of the Company determines
(upon approval by a majority of the Continuing Directors (as such term
is hereinafter defined)) 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 a
sufficient number of shares of Common Stock 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 purpose of this
Agreement.
(b) "Adjustment Shares" has the meaning set forth in
Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as such term is hereinafter defined).
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(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly, for purposes
of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any
comparable or successor law or regulation); or
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, 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 (whether or not in writing, other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; 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 further, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (x) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act
Regulations, and (y) is not reportable by such Person 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 (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, (whether or not in writing,
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to subparagraph (i) of this
paragraph (e)) or disposing of any securities of the Company;
provided, however, that in no case shall an officer or director of the
Company be deemed (A) the Beneficial Owner of any securities
beneficially owned by another officer or director of the Company
solely by reason of actions undertaken by such persons in their
capacity as officers or directors of the Company or (B) the Beneficial
Owner of securities held of record by the trustee of any employee
benefit plan of the Company or any Subsidiary of the Company for the
benefit of any employee of the Company or any Subsidiary of the
Company, other than the officer or director, by reason of any
influence that such officer or director may have over the voting of
the securities held in the plan;
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.
(e) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in the State of
California or the state in which the principal office of the Rights Agent is
located are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., California time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., California time, on the next
succeeding Business Day.
(g) "Common Stock" when used with reference to the
Company shall mean the shares of common stock, par value $0.01, of the Company.
"Common Stock" when used with reference to any Person other
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than the Company shall mean the capital stock (or other 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.
(h) "Company" shall have the meaning set forth in the
recitals to this Agreement.
(i) "Continuing Director" shall mean a member of the
Board of Directors of the Company who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or agent of
an Acquiring Person or of any such Affiliate or Associate, and who was either
(i) a member of the Board of Directors prior to the date of this Agreement, or
(ii) subsequently became a member of the Board of Directors and whose election
or nomination for election is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors.
(j) "current per share market price" shall have the
meaning set forth in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(m) "equivalent preferred shares" shall have the meaning
set forth in Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(o) "Exchange Act Regulations" shall mean the General
Rules and Regulations under the Exchange Act, as amended.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "Nasdaq" shall have the meaning set forth in Section
11(d).
(s) "Person" shall mean any individual, firm,
corporation, joint venture, limited liability company, partnership or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(t) "Preferred Stock" shall mean shares of Series A
Participating Preferred Stock, par value $0.01 per share, of the Company having
the rights and preferences set forth in substantially the Form of Certificate
of Designation attached to this Agreement as Exhibit A.
(u) "preferred stock equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereto.
(v) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(w) "Record Date" shall have the meaning set forth in the
recitals to this Agreement.
(x) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(y) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(z) "Right" shall have the meaning set forth in the
recitals to this Agreement.
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(aa) "Rights Agent" shall have the meaning set forth in
the recitals to this Agreement.
(ab) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(ac) "Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals to this Agreement.
(ad) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A), (B) or (C).
(ae) "Section 11(a)(iii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(af) "Section 13 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(ag) "Section 24(a) Exchange Ratio" has the meaning set
forth in Section 24(a) hereof.
(ah) "Securities Act" shall mean the Securities Act of
1933, as amended.
(ai) "Shares Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
an Acquiring Person.
(aj) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ak) "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.
(al) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(am) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(an) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(ao) "Unit" shall have the meaning set forth in the
recitals to this Agreement.
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 Rights Certificates. (a) Until the
earlier of (i) the Close of Business on the Shares Acquisition Date and (ii)
the Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Company's Board of Directors upon approval by a
majority of the Continuing Directors prior to such time as any Person becomes
an Acquiring Person and of which the Company will give the Rights Agent prompt
written notice) after the date that a tender or exchange offer 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
shares of Common Stock for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule or of the first public announcement of
the intention of any Person (other than
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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 shares of
Common Stock for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer, if upon consummation thereof such Person would be the
Beneficial Owner of 15% or more of the shares of Company Common Stock then
outstanding (the earlier of (i) and (ii) above being the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for shares of Common Stock registered in the names
of the holders thereof (which certificates shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (y) the right to
receive Rights Certificates will be transferable only in connection with the
transfer of shares of Common Stock. As soon as practicable after the
Distribution Date, the Company will notify the Rights Agent thereof and 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
shares of Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Rights
Certificate, in substantially the form of Exhibit B hereto (a "Rights
Certificate"), evidencing one Right for each share of Common Stock so held. As
of the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of shares
of Common Stock 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 shares of Common Stock 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 together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the
Expiration Date), the surrender for transfer of any certificate for shares of
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.
(c) Certificates for shares of Common Stock which become
outstanding (including, without limitation, reacquired shares of Common Stock
referred to in the last sentence of this paragraph (c)) after the Record Date
but prior to the earliest of the Distribution Date and the 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 ONYX
ACCEPTANCE CORPORATION, A DELAWARE CORPORATION AND AMERICAN STOCK
TRANSFER AND TRUST COMPANY, A NEW YORK BANKING CORPORATION, DATED AS
OF JULY 8, 1997 (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 ONYX ACCEPTANCE CORPORATION.
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. ONYX ACCEPTANCE CORPORATION
WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS
AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date and the Expiration Date, the Rights associated
with the shares of Common Stock represented by such certificates
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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 shares of Common Stock represented thereby. In the event
that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the shares
of Common Stock which are no longer outstanding.
Section 4. Form of Rights Certificates. (a) The Rights
Certificates (and the forms of election to purchase Units of Preferred Stock
and of assignment 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 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 or transaction reporting system on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates shall entitle the
holders thereof to purchase the number of Units of Preferred Stock as shall be
set forth therein at the price per Unit of Preferred Stock set forth therein,
but the number of such Units of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Continuing Directors of the
Company has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(e) hereof shall
contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS 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 BETWEEN ONYX
ACCEPTANCE CORPORATION, A DELAWARE CORPORATION AND AMERICAN
STOCK TRANSFER AND TRUST COMPANY, A NEW YORK BANKING
CORPORATION, AS RIGHTS AGENT, DATED AS OF JULY 8, 1997 (THE
"RIGHTS AGREEMENT"). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF THE RIGHTS
AGREEMENT.
Section 5. Countersignature and Registration. (a) The
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President, any of its Vice Presidents, or its Treasurer or
Chief Financial Officer, 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 Rights 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 Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights 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 Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any person who, at the
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actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) 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 Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to the provisions of Sections 4(b), 7(e) and 14
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights 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 Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights 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 Sections 4(b), 7(e) and 14 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights 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 Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights 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 Rights Certificate if mutilated, the Company will make and
deliver a new Rights Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Except as provided in Sections 23(c) and 7(e),
the registered holder of any Rights 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 Rights Certificate,
with the form of election to purchase and certification 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 Unit of Preferred Stock as to which the Rights are exercised, at or prior
to the earliest of (i) the Close of Business on the tenth anniversary hereof
(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 (the earlier
of (i), (ii) and (iii) being the "Expiration Date").
(b) The "Purchase Price" for each Unit of Preferred Stock
pursuant to the exercise of a Right shall initially be $50.00 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.
7.
11
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the number of Units of
Preferred Stock (or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required hereunder
to be paid by the holder of such Rights Certificate in cash, or by certified
check or cashier's check payable to the order of the Company, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Stock (or make available, if the
Rights Agent is the transfer agent for the Preferred Stock) a certificate or
certificates for the number of Units of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Company shall have elected to deposit the total
number of Units of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent of
depositary receipts representing such number of Units of Preferred Stock as are
to be purchased (in which case certificates for the Units of Preferred Stock
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 receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt
thereof, deliver such cash to or upon the order of the registered holder of
such Rights Certificate. The payment of the Purchase Price (as such amount may
be reduced (including to zero) pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified bank check or bank draft payable to the order of
the Company. In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Rights Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the a majority of the
Continuing 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 7(e) or (iv) any subsequent transferee 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 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of such Acquiring
Person's Affiliates, Associates or transferees hereunder.
(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 certificate contained in 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
8.
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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 Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred
Stock. (a) The Company covenants and agrees that it will use its best efforts
to cause to be reserved and kept available out of and to the extent of its
authorized and unissued Units of Preferred Stock not reserved for another
purpose that will be sufficient to permit the exercise in full of all
outstanding Rights. Upon the occurrence of any events resulting in an increase
in the aggregate number of shares of Preferred Stock (or other equity
securities of the Company) issuable upon exercise of all outstanding Rights
above the number then reserved, the Company shall make appropriate increases in
the number of shares so reserved.
(b) If the Units of Preferred Stock to be issued and
delivered upon the exercise of the Rights are at any time listed on a national
securities exchange or included for quotation on any transaction reporting
system, the Company shall during the period from the Distribution Date to the
Expiration Date use its best efforts to cause all shares reserved for such
issuance to be listed on such exchange or included for quotation on any such
transaction reporting system upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence
of a Section 11(a)(ii) Event in which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act, with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities or
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained, or an exemption
therefrom shall be available and until a registration statement has been
declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Units of Preferred Stock
(and, following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of rights) shall, at the time of delivery of the
certificates for such Units of Preferred Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) 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
Rights Certificates or of any Units of Preferred Stock 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
9.
13
Rights Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for Units of Preferred Stock in a name
other than that of, the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Units of Preferred Stock upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Units of Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly surrendered 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 Stock (or, following the occurrence
of a Triggering Event, 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 Stock transfer books of the Company are open and
further provided, however, that if delivery of Units of Preferred Stock is
delayed pursuant to Section 9(c), such Persons shall be deemed to have become
the record holders of such Units of Preferred Stock only when such Units first
become deliverable. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to securities 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. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a holder of a Unit of Preferred Stock 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 and kinds of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding shares of Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares Preferred Stock or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), 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 Rights exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital
stock which, if such Rights had been exercised immediately prior to
such date and at a time when the Preferred Stock 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 this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior, to any
adjustment required pursuant to Section 11(a)(ii).
10.
14
(ii) Subject to Section 24 of this Agreement, in the
event that (A) any Acquiring person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and shares of
Company Common Stock shall remain outstanding and unchanged, (2) in
one transaction or a series of transactions, transfer any assets to
the Company or any of its Subsidiaries in exchange (in whole or in
part) for shares of Company Common Stock, for other equity securities
of the Company or any such Subsidiary, or for securities exercisable
for or convertible into shares of equity securities of the Company or
any of its Subsidiaries (whether shares of Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible
into such equity securities other than pursuant to a pro rata
distribution to all holders of shares of Company Common Stock), (3)
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary or plan
than those that could have been obtained in arm's- length negotiations
with an unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a) hereof, (4) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity (other
than transactions, if any, consistent with those engaged in, as of the
date hereof, by the Company and such Acquiring Person or such
Associate or Affiliate), assets (including securities or intangible
assets) having an aggregate fair market value of more than $5,000,000,
other than pursuant to a transaction set forth in Section 13(a)
hereof, (5) receive, or any designee, agent or representative of such
Acquiring Person or any Affiliate or Associate of such Acquiring
Person shall receive, any compensation from the Company or any of its
Subsidiaries other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) receive the benefit, directly or
indirectly (except proportionately as a holder of shares of Company
Common Stock or as required by law or governmental regulation), of any
loans, advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the Company or any
of its Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity; or (B) any Person shall
become an Acquiring Person, unless the event causing the Person to
become an Acquiring Person is a transaction set forth in Section
13(a); or (C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries, other than a transaction or transactions to which
the provisions of Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries that is directly
or indirectly beneficially owned by any Acquiring Person or any Person
or any Associate or Affiliate of any Acquiring Person;
then promptly following the occurrence of an event described in Section
11(a)(ii)(A), (B) or (C) (a "Section 11(a)(ii) Event"), proper provision shall
be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right, upon
exercise thereof in accordance with the terms of this Agreement and payment of
the then-current total Exercise Price, in lieu of the number of Units of
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, such number of Units of
Preferred Stock as shall equal the result obtained by multiplying the
then-current Purchase Price by the then number of Units of Preferred Stock for
which a Right was exercisable (or would have been exercisable if the
Distribution Date had occurred) immediately prior to the first
11.
15
occurrence of a Triggering Event, and dividing that product by 50% of the
current per share market price (determined pursuant to Section 11(d) hereof)
for shares of Common Stock on the date of occurrence of the Triggering Event
(such number of Units of Preferred Stock being hereinafter referred to as the
"Adjustment Shares").
(iii) In lieu of issuing Units of Preferred Stock in
accordance with Section 11(a)(ii) hereof, the Company may, if the
Board of Directors of the Company, upon approval by a majority of the
Continuing Directors, determines that such action is necessary or
appropriate and not contrary to the interest of holders of Rights
(and, in the event that the number of Units of Preferred Stock which
are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights, or if any necessary regulatory approval for such
issuance has not been obtained by the Company, the Company shall): (A)
determine the excess of (1) the value of the Units of Preferred Stock
issuable upon the exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess being referred to as the "Spread") and
(B) with respect to each Right, make adequate provision to substitute
for such Units of Preferred Stock, upon exercise of the Rights, (1)
cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, Common Stock
or shares or units of shares of any series of preferred stock which
the Board of Directors of the Company, upon approval by a majority of
the Continuing Directors, has deemed to have the same value as the
Units of Preferred Stock (such shares or Units of preferred stock are
herein called "preferred stock equivalents")), except to the extent
that the Company has not obtained any necessary regulatory approval
for such issuance, (4) debt securities of the Company, except to the
extent that the Company has not obtained any necessary regulatory
approval for such issuance, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of
Directors of the Company, upon approval by a majority of the
Continuing Directors, based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company, upon approval by a majority of the Continuing Directors;
provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) occurrence of a Section 11(a)(ii)
Event, or (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) or (y) being
referred to herein as the "Section 11(a)(iii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Units
of Preferred Stock (to the extent available), except to the extent
that the Company has not obtained any necessary regulatory approval
for such issuance, and then, if necessary, cash, which Units and/or
cash have an aggregate value equal to the Spread.
(b) In the event that the Company shall fix a record date
for the issuance of rights, options or warrants to all holders of Units of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Units of Preferred Stock
(or shares having the same rights, privileges and preferences as the Preferred
Stock ("equivalent preferred shares")) or securities convertible into Units of
Preferred Stock or equivalent preferred shares at a price per Unit of Preferred
Stock or equivalent preferred share (or having a conversion price per share, if
a security convertible into Units of Preferred Stock or equivalent preferred
shares) less than the then current per share market price of the Preferred
Stock (as determined pursuant to Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Units of Preferred
Stock outstanding on such record date plus the number of Units of Preferred
Stock which the aggregate offering price of the total number of Units of
Preferred Stock and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Units of Preferred Stock outstanding on such
record date plus the number of additional Units of Preferred Stock 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).
In case such
12.
16
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 a majority of the Continuing Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Units of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, 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 a
distribution to all holders of Units of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend) assets (other
than a dividend payable in Units of Preferred Stock but including any dividend
payable in equity securities other than Preferred Stock) or subscription rights
or warrants (excluding those referred to in Section 11(d) 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 (as determined pursuant to Section 11(d)) of the Preferred Stock on such
record date, less the fair market value (as determined in good faith by a
majority of the Continuing Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holder of rights) of the cash, assets or evidences of
indebtedness to be distributed or of such subscription rights or warrants
distributable in respect of a share of Preferred Stock and the denominator of
which shall be such current per share market price (as determined pursuant to
Section 11(d)) of a share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for
the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in
the event that the "current per share market price" of the Security is
determined during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares, or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of thirty (30) Trading Days
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
then, and in each such case, the "current per share market price"
shall be appropriately adjusted to reflect the "current market price"
per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the Nasdaq National Market ("Nasdaq")
or, if the Security is not listed or admitted to trading on the
Nasdaq, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the 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 upon
approval by a majority of the Continuing Directors. If on any such
date no market maker is making a market in the Security, the "current
per share market price" of such Security on such date as determined in
good faith by the Continuing Directors of the Company as provided for
above shall be used. The term "Trading Day" shall mean a day on which
the
13.
17
principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section
11(d)(i). If the "current per share market price" of the Preferred
Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the "current per share
market price" of the Preferred Stock shall be conclusively deemed to
be an amount equal to $1,000 (as such amount may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to shares of Company Common Stock
occurring after the date of this Agreement) multiplied by the current
market price per share of Company Common Stock. If shares of neither
the Company Common Stock nor Preferred Stock is publicly held or so
listed or traded, "current per share market price" of the Preferred
Stock shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, upon approval by a majority
of the Continuing Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights.
(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-thousandth of a share of Preferred Stock or one one-hundredth 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 Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) hereof, the holder of any Rights thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than Units of Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Rights and the Purchase Price thereof 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 Stock
contained in Section 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l)
and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock 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
Units of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Units of Preferred Stock (calculated to the nearest one-millionth of a share of
Preferred Stock) obtained by dividing (i) the product obtained by multiplying
(x) the number of Units of Preferred Stock 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 by, (ii) 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 Units of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number
14.
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of Rights shall be exercisable for the number of Units of Preferred Stock 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 one-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 Rights Certificates have been issued, shall be at
least ten days later than the date of the public announcement. If Rights
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 Rights Certificates on such
record date Rights 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 Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Rights 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 Units of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per Unit and the number of
Units of Preferred Stock which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value of the number
of Units of Preferred Stock 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 number of Units of Preferred Stock 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 Rights exercised after such record
date of that number of Units of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Units of Preferred Stock 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 (fractional or otherwise)
upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, 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 (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any Unit of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of Preferred
Stock or securities which by their terms are convertible into or exchangeable
for Preferred Stock, (iv) dividends on Preferred Stock payable in Preferred
Stock or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of Units of its Preferred
Stock shall not be taxable to such stockholders.
(n) The Company shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
15.
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transaction, or a series of 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 other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the Person which constitutes, or
would constitute the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its stockholders or other persons
holding an equity interest in such Person Rights previously owned by such
Person or any of its Affiliates and Associates; provided, however, this Section
11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not,
except as permitted by Section 23 or Section 26, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) 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 outstanding shares of Common Stock payable in shares of
Common Stock or (ii) effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of dividends in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in any such case the number of Units of Preferred Stock purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of Units of Preferred Stock so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event. The adjustments provided for in this Section
11(p) shall be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or consolidation is effected.
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
shares of Common Stock or Units of Preferred Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Rights Certificate in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the
failure by the Company to make such certification or give such notice shall not
affect the validity of or the force or effect of the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained therein and shall not be deemed to
have knowledge of such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) Except as provided in Section 13(b) hereof, in
the event that, following a Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o))
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the shares of Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) to any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
in one or more transactions, directly or indirectly, assets or earning power
16.
20
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), any such event being a "Section 13 Event,"
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e), shall thereafter have
the right to receive, upon the exercise thereof at the then current Purchase
Price, such number of validly authorized and issued, fully paid and
nonassessable shares of Common Stock of the Principal Party (as defined in
Section 13(b) herein), which shares shall not be subject to any liens,
encumbrances, rights of first refusal, transfer restrictions or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Units of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such Units for
which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect
hereunder but for such first occurrence) and (2) dividing that product (which,
following the direct occurrence of a Section 13 Event, shall be the "Purchase
Price" for all purposes of this Agreement) by 50% of the current per share
market price (determined pursuant to Section 11(d)) of the shares of Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall, for all
purposes of this Agreement, thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) shall be of
no further effect following the first occurrence of any Section 13 Event.
(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), (A) the Person that
is the issuer of any securities into which shares of Company Common
Stock are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of shares of Common Stock that
has the highest aggregate current market price (determined pursuant to
Section 11(d)) and (B) if no securities are so issued, the Person that
is the other party to such merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of which has
the highest aggregate current market price (determined pursuant to
Section 11(d)); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the largest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power transferred pursuant
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)); provided,
however, that in any such case, (1) if the Common Stock of such Person
is not at such time and have not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Stock"), or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person that
has Registered Common Stock outstanding, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered
Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such other
Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of
17.
21
such other Persons is the issuer of the Registered Common Stock having
the highest aggregate current per share market price (determined
pursuant to Section 11(d)); and (4) if the Common Stock of such Person
is not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one
Person, and none of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever ultimate
parent entity is the corporation having the greatest stockholders'
equity or, if no such ultimate parent entity is a corporation, shall
refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of Common Stock which 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 such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a registration
statement under the Securities Act with respect to the shares of
Common Stock that may be acquired upon exercise of the Rights, (B)
cause such registration statement to remain effective (and to include
a prospectus complying with the requirements of the Securities Act)
until the Expiration Date, and (C) as soon as practicable following
the execution of such agreement take such action as may be required to
ensure that any acquisition of such shares of Common Stock upon the
exercise of the Rights complies with any applicable state securities
or "blue sky" laws; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to
a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or Bylaws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as
a consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then
current market price per share (determined pursuant to Section 11(d)) or
securities exercisable for, or convertible into, shares of Common Stock of such
Principal Party at less than such then current marker price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
the shares of Common Stock of such Principal Party pursuant to the provisions
of this Section 13, then, in such event, the Company shall not consummate any
such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party shall have
been cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. In
the event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
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
18.
22
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 Nasdaq or, if the
Rights are not listed or admitted to trading on the Nasdaq, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid 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 Directors. If on
any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Company, upon approval by a majority of the Continuing
Directors, shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided,
however, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Rights 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 share of Preferred Stock as
determined pursuant to Section 11(d).
(c) 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 Section 18 hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of certificates representing shares of Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, a certificate representing shares of Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of a certificate representing shares of Common
Stock), may, on such holder's own behalf and for such holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations hereunder, and injunctive relief against actual
or threatened violations of the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Rights 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 shares of the Company's
Common Stock;
19.
23
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the Units
of Preferred Stock 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 Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights 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 gross negligence, or willful misconduct on the part
of the Rights Agent, for any action taken, suffered or omitted by the Rights
Agent in connection with the execution, acceptance and administration of this
Agreement and the exercise and performance hereunder of its duties, including
the costs and expenses of defending against and appealing any claim of
liability in the premises. The indemnity provided herein shall survive the
termination of this Agreement and the expiration of the Rights. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company.
The Rights Agent may conclusively rely upon and shall be
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 and the exercise and performance of its duties hereunder in reliance
upon any Rights Certificate or certificate for Units of Preferred Stock or
shares of Common Stock 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.
20.
24
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) 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 stock transfer 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 Rights
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 Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions and no implied duties or obligations shall be
read into this Agreement against the Rights Agent, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) Before the Rights Agent acts or refrains from acting,
it may consult with legal counsel of its choice (who may be legal counsel for
the Company), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the administration, exercise and
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer 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, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence 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 Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the legality, validity or enforceability
or the execution of any Rights Certificate (except its countersignature thereof
and has actual knowledge of such change or
21.
25
adjustment); nor shall it be liable or responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights 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 Section 3, 11,
13, 23 or 24, 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 Rights Certificates after receipt of the certificate described in
Section 12 hereof or has actual knowledge of 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 Units of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether
any Preferred Stock 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 administration, exercise and
performance of its duties hereunder from any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Secretary
or the Chief Financial Officer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
responsible or liable for any action taken, suffered or omitted 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 under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five (5) Business Days after the date any officer of the Company actually
received such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(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 the Rights Agent in good faith believes 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 Rights Certificate
surrendered to the Rights Agent for exercise, transfer, split up, combination
or exchange, the certification on the form of assignment or form of election to
purchase, as the case may be, that the Rights evidenced by the Rights
Certificate are not owned by an Acquiring
22.
26
Person, or an Affiliate or Associate thereof, has either not been completed or
in any manner indicates any other response thereto, the Rights Agent shall not
take any further action with respect to such requested exercise, transfer,
split up, combination or exchange, without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Common Stock or Preferred Stock (as to which
the Rights Agent has received prior written notice) by registered or certified
mail, and the Company shall mail notice thereof to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock or Preferred Stock (as to which the Rights
Agent has received prior written notice) by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the registered
holder of any Rights 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 a
corporation organized and doing business under the laws of the United States or
of any state of the United States, in good standing, authorized under such laws
to exercise corporate trust or stock transfer powers, and 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 $25 million. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock or Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights 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 Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors
upon approval by a majority of the Continuing 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 Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee benefit plan or arrangement
or upon the exercise, conversion or exchange of securities of the Company
currently outstanding or issued at any time in the future by the Company and
(b) may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, upon approval by a majority of the Continuing
Directors, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued and this sentence shall be null and
void ab initio if, and to the extent that, such issuance or this sentence would
create a significant risk of or result in material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued or
would create a significant risk of or result in such options' or employee
plans' or arrangements' failing to qualify for otherwise available special tax
treatment and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
23.
27
Section 23. Redemption and Termination. (a) The Company
may, at its option, upon approval by a majority of the Continuing Directors, at
any time prior to the earlier of (i) the Shares Acquisition Date or such later
date as may be determined by a majority of the Continuing Directors and
publicly announced by the Company, or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 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 either in cash, shares
of Common Stock (based on the current per share market price thereof (as
determined pursuant to Section 11(d) hereof) at the time of redemption), or any
other form of consideration deemed appropriate by the Board of Directors;
provided that, notwithstanding anything to the contrary contained in this
Section 23(a), the Company may not take any action pursuant to this Section
23(a) unless (x) at the time of the action of the Board of Directors of the
Company approving such redemption and the form of payment of the Redemption
Price, there are then in office not less than two Continuing Directors and (y)
such action is approved by a majority of the Continuing Directors then in
office. The redemption of the Rights by the Board of Directors may be made
effective at such time on such basis and with such conditions as a majority of
the Continuing Directors in its sole discretion may establish.
(b) Immediately upon the action of a majority of the
Continuing Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, 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 a majority of the Continuing Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and 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 Stock. 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 shares of Common Stock prior to the Distribution Date.
(c) Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable pursuant to Section 7(a)
at any time when the Rights are redeemable hereunder.
Section 24. Exchange. (a) The Company, at its option,
upon approval by a majority of the Continuing Directors, at any time after any
Person becomes an Acquiring Person, may 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 7(f) hereof) for Units of
Preferred Stock at an exchange ratio as specified in the next sentence, such
exchange ratio being hereinafter referred to as the "Section 24(a) Exchange
Ratio". The Section 24(a) Exchange Ratio shall equal, subject to adjustment to
reflect stock splits, stock dividends and similar transactions occurring after
the date hereof, that number obtained by dividing the Purchase Price by the
then current per share market price per Unit of Preferred Stock on the earlier
of (i) the date on which any Person becomes an Acquiring Person and (ii) the
date on which a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity) is first published or sent or given within
the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any successor
rule, if upon consummation thereof such Person would be the Beneficial Owner of
15% or more of the shares of Company Common Stock then outstanding.
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to
24.
28
such plan acting in such capacity), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of Units of Preferred
Stock equal to the number of such Rights held by such holder multiplied by the
Section 24(a) 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. 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 shares of
Common Stock 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 7(f) hereof) held
by each holder of Rights.
(c) In the event that the number of shares of Preferred
Stock which are authorized by the Company's Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 34, the Company shall take all
such action as may be necessary to authorize additional shares of Preferred
Stock for issuance upon exchange of the Rights or make adequate provision to
substitute (1) cash, (2) Company Common Stock or other equity securities of the
Company, (3) debt securities of the Company, (4) other assets, or (5) any
combination of the foregoing, having an aggregate value equal to the Adjustment
Spread, where such aggregate value has been determined by a majority of the
Continuing Directors. To the extent that the Company determines that some
action need be taken pursuant to clauses (i), (ii) or (iii) of this Section
24(d), the Board of Directors, upon approval by a majority of the Continuing
Directors, may temporarily suspend the exercisability of the Rights for a
period of up to sixty (60) days following the date on which the event described
in Section 24(a) shall have occurred, in order to seek any authorization of
additional shares of Preferred Stock and/or to decide the appropriate form of
distribution to be made pursuant to the above provision and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended.
(d) The Company shall not be required to issue fractions
smaller than or to distribute certificates which evidence fractions smaller
than one one-thousandth of a share of Preferred Stock. In lieu thereof, the
Company shall pay to the registered holders of the Rights Certificates with
regard to which such fractional Units would otherwise be issuable an amount in
cash equal to the same fraction of the current market value (as determined
pursuant to Section 11(c)(i) hereof) of one Unit of Preferred Stock.
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 Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional Units of Preferred Stock or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding Preferred
Stock), (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), 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 Stock payable in shares of Common Stock or to
effect a subdivision, combination or consolidation of the shares of Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock), then, in each such case, the Company shall give to each
holder of a Rights Certificate, in accordance with Section
25.
29
26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Common Stock
and/or Units of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least ten (10) days prior to the record date for determining
holders of the Units of Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock and/or Units of Preferred Stock,
whichever shall be the earlier.
(b) In case any of the events 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 Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof. In the event any Person becomes an Acquiring
Person, the Company will promptly notify the Rights Agent thereof.
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
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Onyx Acceptance Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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
Rights Certificate to or on the Rights Agent shall be sent by registered or
certified mail and shall be deemed given upon receipt and addressed (until
another address is filed in writing with the Company) as follows:
American Stock Transfer and Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights 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 may supplement or amend this Agreement in any
respect, without the approval of any holders of Rights, by action of its Board
of Directors, upon approval by a majority of the Continuing Directors, and the
Rights Agent shall, if the Company so directs, execute such supplement or
amendment. From and after the Distribution Date, the Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Rights, by action of its Board of Directors, upon approval by a majority of the
Continuing Directors, in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an
26.
30
Acquiring Person or an Affiliate or Associate of an Acquiring Person),
including, without limitation, to change the Purchase Price, the Redemption
Price, any time periods herein specified, and any other term hereof, any such
supplement or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be amended in any
manner which would adversely affect the interests of the holders of Rights.
Upon receipt of a certificate from an appropriate officer of the Company that
the proposed supplement or amendment is consistent with this Section 27 and,
after such time as any Person has become an Acquiring Person, that the proposed
supplement or amendment does not adversely affect the interests of the holders
of Rights, the Rights Agent shall execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of
Directors. (a) For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock 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. 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 Company, the Rights Agent,
the holders of the Rights Certificates and all other parties and (y) not
subject the Board or the Continuing Directors to any liability to the holders
of the Rights.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the concurrence of a majority of the Continuing Directors then
in office shall be required to give effect to any action, calculation,
interpretation or determination made by the Board of Directors of the Company
in the administration of this Agreement and the exercise of the rights or
powers granted to the Board of Directors of the Company, to the Continuing
Directors or to the Company pursuant to this Agreement and no effect shall be
given to any such action, calculation, interpretation, determination or
exercise of rights or powers unless at least two Continuing Directors are then
in office.
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 Rights
Certificates (and, prior to the Distribution Date, the registered holders of
shares of Common Stock which include the Rights) 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 Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock which include the Rights).
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; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors, determines in its good faith judgment
that severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth in
27.
31
Section 23 hereof shall be reinstated and shall not expire until the tenth
business day following the date of such determination by the Board of Directors
of the Company.
Section 32. Governing Law. This Agreement and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of California and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
ATTEST: ONYX ACCEPTANCE CORPORATION,
a Delaware corporation
By By
-------------------------------- --------------------------------
Name: Name:
Title: Title
ATTEST: AMERICAN STOCK TRANSFER AND
TRUST COMPANY, a New York banking
corporation, as Rights Agent
By By
-------------------------------- ---------------------------------
Name: Name:
Title: Title
28.
32
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A PARTICIPATING PREFERRED STOCK
of
ONYX ACCEPTANCE CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
__________________________________
A-1
33
CERTIFICATE OF DESIGNATION OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A PARTICIPATING PREFERRED STOCK
OF ONYX ACCEPTANCE CORPORATION
Pursuant to Section 151 of the Delaware General Corporation Law
Onyx Acceptance Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
1. The name of the Corporation is Onyx Acceptance Corporation.
2. That pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Corporation's Certificate of Incorporation,
the Board of Directors adopted the following resolution creating a series of
200,000 shares of Preferred Stock designated as Series A Participating
Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the
Board of Directors does hereby provide for the issue of a series of
Preferred Stock, par value $0.01 per share, of the Corporation, to be
designated "Series A Participating Preferred Stock," initially
consisting of 200,000 shares and to the extent that the designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series A
Participating Preferred Stock are not stated and expressed in the
Certificate of Incorporation, does hereby fix and herein state and
express such designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions
thereof, as follows (all terms used herein which are defined in the
Certificate of Incorporation shall be deemed to have the meanings
provided therein):
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Participating Preferred Stock," par value
$0.01 per share, and the number of shares constituting such series shall be
200,000. Such number of share may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series A Participating Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Participating Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior right of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Participating Preferred Stock with respect
to dividends, each holder of one one-thousandth (1/1,000) of a share (a "Unit")
of Series A Participating Preferred Stock shall be entitled to receive when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a Unit of Series A
Participating Preferred Stock, in an amount per Unit (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
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amount of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Corporation's Common Stock, $0.01 par value (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Participating Preferred Stock. In the event the Corporation shall at
any time after July 21, 1997 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
Units of Series A Participating Preferred Stock were entitled immediately prior
to such event under the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(b) The Corporation shall declare a dividend or
distribution on Units of Series A Participating Preferred Stock as provided in
paragraph (a) above immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common Stock);
provided, however, that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
a dividend of $1.00 per Unit on the Series A Participating Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(c) Dividends shall begin to accrue and be cumulative on
each outstanding Unit of Series A Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such Unit
of Series A Participating Preferred Stock, unless the date of issue of such
Unit is prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such Unit shall begin to accrue from the date of
issue of such Unit, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
Units of Series A Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Units of Series A Participating Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such Units shall be allocated pro rata on a Unit-by-Unit
basis among all such Units at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of Units of Series A
Participating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units of Series A
Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each Unit of Series A Participating Preferred Stock shall entitle
the holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per Unit to which holders of Units
of Series A Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
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(b) Except as otherwise provided herein or by law, the
holders of Units of Series A Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Units of
Series A Participating Preferred Stock shall be in arrears in
an amount equal to six quarterly dividends thereon, then
during the period (a "default period") from the occurrence of
such event until such time as all accrued and unpaid dividends
for all previous quarterly dividend periods and for the
current quarterly dividend period on all Units of Series A
Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment, all holders of
Units of Series A Participating Preferred Stock, voting
separately as a class, shall have the right to elect two
members of the Board of Directors of the Corporation
(hereinafter, each member is referred to as a "Director").
(ii) During any default period, such voting rights
of the holders of Units of Series A Participating Preferred
Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(c) or at any
annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting
rights nor any right of the holders of Units of Series A
Participating Preferred Stock to increase, in certain cases,
the authorized number of Directors may be exercised at any
meeting unless one-third of the outstanding Units of Series A
Participating Preferred Stock shall be present at such meeting
in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders
of Units of Series A Participating Preferred Stock of such
rights. At any meeting at which the holders of Units of
Series A Participating Preferred Stock shall exercise such
voting rights initially during an existing default period,
they shall have the right, voting separately as a class, to
elect Directors to fill up to two vacancies in the Board of
Directors, if any such vacancies may then exist, or, if such
right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the
holders of the Series A Participating Preferred Stock shall
have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them
of the required number. After the holders of Units of Series
A Participating Preferred Stock shall have exercised their
right to elect Directors during any default period, the number
of Directors shall not be increased or decreased except as
approved by a vote of the holders of Units of Series A
Participating Preferred Stock as herein provided or pursuant
to the rights of any equity securities ranking senior to the
Series A Participating Preferred Stock.
(iii) Unless the holders of Series A Participating
Preferred Stock shall, during an existing default period, have
previously exercised their right to elect Directors, the Board
of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 25% of the total number
of the Units of Series A Participating Preferred Stock
outstanding may request, the calling of a special meeting of
the holders of Units of Series A Participating Preferred
Stock, which meeting shall thereupon be called by the
Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Units of Series A
Participating Preferred Stock are entitled to vote pursuant to
this paragraph (c)(iii) shall be given to each holder of
record of Units of Series A Participating Preferred Stock by
mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the
aggregate not less than 25% of the total number of outstanding
Units of Series A Participating Preferred Stock.
Notwithstanding the provisions
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of this paragraph (c)(iii), no such special meeting shall be called
during the 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) During any default period, the holders of
shares of Common Stock and Units of Series A Participating
Preferred Stock, and other classes or series of stock of the
Corporation, if applicable, shall continue to be entitled to
elect all the Directors until holders of the Units of Series A
Participating Preferred Stock shall have exercised their right
to elect two Directors voting as a separate class, after the
exercise of which right (x) the Directors so elected by the
holders of Units of Series A Participating Preferred Stock
shall continue in office until their successors shall have
been elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of Directors
may (except as provided in paragraph (c)(ii) of this Section
3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of capital
stock which elected the Director whose office shall have
become vacant. References in this paragraph (c) to Directors
elected by the holders of a particular class of capital stock
shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Units of Series A
Participating Preferred Stock as a separate class to elect
Directors shall cease, (y) the term of any Directors elected
by the holders of Units of Series A Participating Preferred
Stock as a separate class shall terminate, and (z) the number
of Directors shall be such number as may be provided for in
the Certificate of Incorporation or Bylaws irrespective of any
increase made pursuant to the provisions of paragraph (c)(ii)
of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the
Certificate or bylaws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining Directors.
(vi) The provisions of this paragraph (c) shall
govern the election of Directors by holders of Units of Series
A Participating Preferred Stock during any default period
notwithstanding any provisions of the Certificate to the
contrary, including, without limitation, the provisions of
Article IV of the Certificate.
(d) Except as required by law, the holders of Series A
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) The Corporation shall not declare any dividend on,
make any distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Common Stock after the first issuance of a Unit of
Series A Participating Preferred Stock unless concurrently therewith it shall
declare a dividend on the Series A Participating Preferred Stock as required by
Section 2 hereof.
(b) Whenever quarterly dividends or other dividends or
distributions payable on Units of Series A Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on Units of Series
A Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Participating Preferred Stock;
A-5
37
(ii) declare or pay dividends on, make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with Series A Participating Preferred Stock,
except dividends paid ratably on Units of Series A
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Participating Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any Units of Series A Participating Preferred
Stock, or any shares of stock ranking on a parity with the
Series A Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or
classes.
(c) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (a)
of this Section 4, purchase or otherwise acquire such shares at such time and
in such manner.
Section 5. Reacquired Shares. Any Units of Series A
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such Units shall upon their cancellation
become authorized but unissued Units of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Participating Preferred
Stock unless, prior thereto, the holders of Units of Series A Participating
Preferred Stock shall have received $1,000 per Unit, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of Units
of Series A Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph (c) below to reflect such events as stock splits, stock dividends
and recapitalization with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding Units of Series A Participating Preferred Stock and shares of
Common Stock, respectively, holders of Units of Series A Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Units of Preferred
Stock and shares of Common Stock, on a per Unit and per share basis,
respectively.
A-6
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(b) In the event, however, that there are not sufficient
assets available to permit payment in full to the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders
of the Series A Participating Preferred Stock and such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(c) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such event the Units of Series A Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per Unit (subject to
the provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of Units of Series A Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The Units of Series A Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Units of Series A Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preference or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Units of Series A Participating Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series A Participating Preferred
Stock may be issued in Units or other fractions of a share which Units or
fractions shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series
A Participating Preferred Stock.
A-7
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IN WITNESS WHEREOF, this Certificate is executed on behalf of this
Corporation by its President this 8th day of July, 1997.
___________________________________________
▇▇▇▇ ▇. ▇▇▇▇, President
A-8
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Exhibit B
Form of Rights Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JULY 20, 2007 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
THE OPTION OF THE COMPANY AT $.01 PER RIGHT AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHTS CERTIFICATE
Onyx Acceptance Corporation, a Delaware corporation
This certifies that _______________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of July 8, 1997 (the "Rights Agreement"), between
Onyx Acceptance Corporation, a Delaware corporation (the "Company"), and
American Stock Transfer and Trust Company, a New York banking corporation (the
"Rights Agent") to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
California time, on July 20, 2007 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth (a "Unit") of a fully paid nonassessable share of Series A
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Stock") of the Company, at a purchase price of $50.00 per Unit of Preferred
Stock (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Rights Certificate (and the number of Units of
Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
_______, _____ based on the Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of Units of
Preferred Stock which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Stock as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled
B-1
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to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of $.01 per Rights.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Rights or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of Units of Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the signature of the proper officers of the Company
and its corporate seal. Dated as of ___________ ___, _______.
ATTEST: ONYX ACCEPTANCE
CORPORATION, a Delaware
corporation
By
-------------------------- ------------------------------
Name: Name:
Title: Secretary Title: President
Countersigned:
American Stock Transfer and Trust
Company, a New York banking corporation
By
----------------------------------------
Authorized Signatory
B-2
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Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ________________________________ hereby sells, assigns and
transfers unto
______________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ ___
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________, ____
_______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities
Transfer Association Inc. recognized signature guarantee medallion program.
______________________________________________________________________________
CERTIFICATION
The undersigned hereby certifies that the Rights evidenced by
this Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_________________________________________
Signature
Form of Reverse Side of Rights Certificate -- continued
B-3
43
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate.)
To Onyx Acceptance Corporation
The undersigned hereby irrevocably elects to exercise
___________________________ Rights represented by this Rights Certificate to
purchase the units of Preferred Stock issuable upon the exercise of such Rights
and requests that certificates for such Preferred Stock be issued in the name
of:
Please insert social security
or other identifying number
---------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------------
(Please print name and address)
Dated: __________________, ____
------------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities
Transfer Association Inc. recognized signature guarantee medallion program.
B-4
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Form of Reverse Side of Rights Certificate -- continued
______________________________________________________________________________
CERTIFICATION
The undersigned hereby certifies that the Rights evidenced by
this Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
______________________________________________________________________________
NOTICE
The signature in the foregoing Forms of Assignment and Election
to Purchase must conform to the name as written upon the face of this Rights
Certificate in every particular, without alteration or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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Exhibit C
ONYX ACCEPTANCE CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK
On July 8, 1997, the Board of Directors of Onyx Acceptance
Corporation, a Delaware corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock (the "Common Stock"), par value $0.01 per share, of the Company. The
dividend is payable on July 21, 1997 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share (a "Unit") of Series A
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), of the Company at a price of $50.00 per Unit (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement dated as of July 8, 1997 (the "Rights Agreement") between
the Company and American Stock Transfer and Trust Company, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Stock or (ii) 10 business days (or such later date as may be
determined by action of the Continuing Directors prior to such time as any
Person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate with a copy of this Summary of Rights
attached thereto.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after the Record Date, upon
transfer or new issuance of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Stock, outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of
the
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Close of Business on the Distribution Date and thereafter such
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on July 20, 2007 (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.
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Units of Preferred Stock of certain rights or warrants to subscribe for or
purchase Units of Preferred Stock at a price, or securities convertible into
Units of Preferred Stock with a conversion price, less than the then current
market price of the Units of Preferred Stock or (iii) upon the distribution to
holders of the Units of Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Units of Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of
Preferred Stock issuable upon exercise of each Rights are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Units of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each Unit of Preferred Stock will be entitled
to an aggregate dividend of 1,000 times the dividend declared per share of
Common Stock. In the event of liquidation, the holders of the Units of
Preferred Stock will be entitled to an aggregate payment of 1,000 times the
payment made per share of Common Stock. Each Unit of Preferred Stock will have
1,000 votes, voting together with the Common Stock. Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each Unit of Preferred Stock will be entitled to receive 1,000
times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting
rights, the value of the Preferred Stock, the Units of Preferred Stock
purchasable upon exercise of each Rights should approximate the value of one
share of Common Stock.
In the event that, after the Rights become exercisable, the
Company is acquired in a merger or other business combination transaction with
an Acquiring Person or an affiliate thereof, or 50% or more of its consolidated
assets or earning power are sold to an Acquiring Person or an affiliate
thereof, proper provision will be made so that each
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holder of a Rights will thereafter have the right to receive, upon exercise
thereof at the then current exercise price of the Rights, 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 Rights.
In the event that any person or group of affiliated or
associated persons becomes the beneficial owner of 15% or more of the
outstanding shares of Common Stock, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Units of Preferred Stock (Common Stock, cash, other
securities or property) having a market value of two times the exercise price
of the Rights.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding shares of Common Stock and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Stock, the Continuing
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in part, for Units of
Preferred Stock at an exchange ratio which shall equal, subject to adjustment
to reflect stock splits, stock dividends and similar transactions occurring
after the date hereof, that number obtained by dividing the Purchase Price by
the then current per share market price per Unit of Preferred Stock on the
earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer is announced by any Person,
if upon consummation thereof such Person would be the Beneficial Owner of 15%
or more of the shares of Company Common Stock then outstanding.
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 shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, 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 Units of Preferred Stock on the
last trading day prior to the date of exercise.
At any time within ten (10) business days after a person or
group of affiliated or associated persons acquire beneficial ownership of 15%
or more of the outstanding Common Stock (unless the Continuing Directors
extends such ten-day period), the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), upon the approval of a majority of the Continuing
Directors. The redemption of the rights may be made effective at such time on
such basis and with such conditions as the Board of Directors, upon the
approval of the Continuing 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
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Rights will be to receive the Redemption Price. The Rights are also redeemable
under other circumstances as specified in the Rights Agreement.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights upon
the approval of a majority of the Continuing Directors, except that from and
after a Distribution Date no such amendment may adversely affect the interests
of the holders of the Rights.
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.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available to stockholders free of
charge from the Company upon written request therefrom. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
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