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ADAPTIVE BROADBAND CORPORATION
AND
BANKBOSTON, N.A.
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF JULY 21, 1999
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Rights Certificates. . . . . . . . . . . . . . . . . . 5
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Rights Certificates . . . . . .11
Section 9. Availability of Common Shares . . . . . . . . . . . . . . . . .11
Section 10. Common Shares Record Date . . . . . . . . . . . . . . . . . . .12
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. . . . . . . . . . . . . . . . . . . . . . . .13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. . .21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . .24
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . .26
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . .26
Section 17. Rights Certificate Holder Not Deemed a Stockholder. . . . . . .27
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . .27
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . .28
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . .28
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . .30
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . .31
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . .32
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . .36
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . .37
Section 28. Determination and Actions by the Board of Directors, etc. . . .38
Section 29. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . .38
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 31. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 32. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 33. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 34. DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . . .39
ii.
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT ("Agreement"), dated as of July 21, 1999, between
ADAPTIVE BROADBAND CORPORATION, a Delaware corporation (the "Company"), and
BANKBOSTON, N.A., a national banking association (the "Rights Agent").
The Board of Directors of the Company authorized and declared a dividend of
one common share purchase right (a "Right") for each Common Share (as such term
is hereinafter defined) outstanding at the close of business on July 26, 1999
(the "Record Date"), each Right representing the right to purchase one Common
Share upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest to occur of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); PROVIDED, HOWEVER, that
Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the
Common Shares then outstanding. Notwithstanding the
foregoing, (A) the term "Acquiring Person" shall not include
(i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee
benefit or compensation plan of the Company or of any
Subsidiary of the Company, (iv) any entity holding Common
Shares for or pursuant to the terms of any such employee
benefit plan or (v) any Person who or which has received the
approval of the Board of Directors of the Company to become
the Beneficial Owner of 20% or more of the Common Shares,
and (B) no Person shall become an "Acquiring Person" either
(x) as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares
then outstanding (PROVIDED, HOWEVER, that if a Person shall
become the Beneficial Owner of 20% or more of the Common
Shares then outstanding by reason of share purchases by the
Company and shall, following written notice from, or public
disclosure by, the Company of such share purchases by the
Company, become the Beneficial Owner of any additional
Common Shares without the prior
1.
consent of the Company and shall then be the Beneficial
Owner of more than 3,000,000 shares of the Common Shares
(subject to adjustment for stock splits, stock combinations,
recapitalizations, reclassifications and the like), then
such Person shall be deemed to be an "Acquiring Person", or
(y) if the Board of Directors determines in good faith that
a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such
Person divests, as promptly as practicable (as determined in
good faith by the Board of Directors), but in any event
within five Business Days, following receipt of written
notice from the Company of such event, of Beneficial
Ownership of a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this
paragraph (a).
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the
date of this Agreement; PROVIDED, HOWEVER, that the limited
partners of a limited partnership shall not be deemed to be
Associates of such limited partnership solely by virtue of
their limited partnership interests.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, within
the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on
the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after
the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public
offering of securities and other than agreements
between the Company and any corporate partner
pursuant to which the right to purchase shares is
conditioned upon the achievement of research or
development milestones), or upon the exercise of
conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall
not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or
2.
understanding; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement,
arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in
accordance with, the applicable rules and
regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such
Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (other than customary agreements with
and between underwriters and selling group members
with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B) hereof) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase, "then outstanding,"
when used with reference to a Person's Beneficial Ownership
of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to own
beneficially hereunder.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by
law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Eastern Time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 p.m., Eastern
Time, on the next succeeding Business Day.
(f) "COMMON SHARES" shall mean the shares of common stock, par
value $.10 per share, of the Company; PROVIDED, HOWEVER,
that, "Common Shares," when used in this Agreement in
connection with a specific reference to any Person other
than the Company, shall mean the capital stock (or equity
interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3 hereof.
3.
(h) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7 hereof.
(i) "INTERESTED STOCKHOLDER" shall mean any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or any
other Person in which any such Acquiring Person, Affiliate
or Associate has an interest, or any other Person acting
directly or indirectly on behalf of or in concert with any
such Acquiring Person, Affiliate or Associate.
(j) "PERSON" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(k) "PURCHASE PRICE" shall have the meaning set forth in
Section 7(b) hereof.
(l) "REDEMPTION DATE" shall have the meaning set forth in
Section 7 hereof.
(m) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such PROVIDED, HOWEVER
that, if such Person is determined not to have become an
Acquiring Person pursuant to clause (y) of
Subsection 1(a)(B) hereof, then no Shares Acquisition Date
shall be deemed to have occurred.
(n) "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.
(o) "TRANSACTION" shall mean any merger, consolidation or sale
of assets described in Section 13(a) hereof or any
acquisition of Common Shares which would result in a Person
becoming an Acquiring Person or a Principal Party (as such
term is hereinafter defined).
(p) "TRANSACTION PERSON" with respect to a Transaction shall
mean (i) any Person who (x) is or will become an Acquiring
Person or a Principal Party (as such term is hereinafter
defined) if the Transaction were to be consummated and
(y) directly or indirectly proposed or nominated a director
of the Company which director is in office at the time of
consideration of the Transaction, or (ii) an Affiliate or
Associate of such a Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such
co-Rights Agent.
4.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Shares Acquisition Date or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the
date of the commencement (determined in accordance with
Rule 14d-2 under the Exchange Act) by any Person (other than
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the
terms of any such plan) to commence, a tender or exchange
offer (which intention to commence remains in effect for
five Business Days after such announcement), the
consummation of which would result in any Person becoming an
Acquiring Person (including any such date which is after the
date of this Agreement and prior to the issuance of the
Rights, the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be
evidenced by the certificates for Common Shares registered
in the names of the holders thereof (which certificates
shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates, and (y) the Rights (and the
right to receive Rights Certificates therefor) will be
transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on
the records of the Company, a Rights Certificate, in
substantially the form of Exhibit A hereto (a "Rights
Certificate"), evidencing one Right for each Common Share so
held, subject to the adjustment provisions of Section 11 of
this Agreement. 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 (directly or through the Rights Agent
or its transfer agent) a copy of a Summary of Rights to
Purchase Common Shares, in substantially the form of
Exhibit B hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding
as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in
the names of the holders thereof. Until the Distribution
Date (or the earlier of the
5.
Redemption Date and the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares
outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares
referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final
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 Adaptive Broadband
Corporation (the "Company") and BankBoston, N.A. as
Rights Agent (the "Rights Agent"), dated as of July
21, 1999, as amended from time to time (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which
is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no
longer be evidenced by this certificate. The
Company will mail to the holder of this certificate
a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described
in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights
Agreement) and certain related persons, whether
currently held by or on behalf of such Person or by
any subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates
shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled
and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which
are no longer outstanding. Notwithstanding this Section
3(c), the omission of a legend shall not affect the
enforceability of any part of this Agreement or the rights
of any holder of the Rights.
6.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the form of election to
purchase Common Shares, the form of assignment and the form
of certification to be printed on the reverse thereof) shall
be substantially the same as Exhibit A 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 on which the Rights may
from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 22 hereof,
the Rights Certificates shall entitle the holders thereof to
purchase such number of Common Shares as shall be set forth
therein at the price per Common Share set forth therein (the
"Purchase Price"), but the number of such Common Shares and
the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and
void pursuant to Section 11(a)(ii) hereof and any Rights
Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence,
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). Accordingly, this
Rights Certificate and the Rights represented hereby
are null and void.
The provisions of Section 11(a)(ii) hereof shall be
operative whether or not the foregoing legend is contained
on any such Rights Certificate.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Rights Certificates shall
be executed on behalf of the Company by its Chairman of the Board,
its Chief Executive Officer, its President, its Vice Chairman of
the Board, its Chief Financial Officer, or any of its Vice
Presidents, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The
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
7.
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 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
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books
for registration and transfer of the 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. Subject to the provisions of Section 11(a)(ii),
Section 14 and Section 24 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final
Expiration Date, any 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 Common Shares 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 Section 11(a)(ii),
Section 14 and Section 24 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.
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
8.
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 issue, execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the
registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Notwithstanding any other provisions hereof, the Company and the
Rights Agent may amend this Agreement to provide for
uncertificated Rights in addition to or in place of Rights
evidenced by Rights Certificates.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any 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 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 Common Share (or such
other number of shares or other securities) as to which the
Rights are exercised, at or prior to the earliest of (i) the
Close of Business on June 30, 2002 (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.
In lieu of issuing Common Shares in accordance with the
first paragraph of Section 7(a) hereof, the Company may, if
a majority of the Board of Directors then in office
determines that such action is necessary or appropriate and
not contrary to the interests of holders of Rights, elect to
(and, in the event that there are not sufficient treasury
shares and authorized but unissued Common Shares to permit
the exercise in full of the Rights in accordance with the
foregoing paragraph, the Company shall) take all such action
as may be necessary to authorize, issue or pay, upon the
exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, preferred stock
of the Company, other securities or any combination thereof
having an aggregate value equal to the value of the Common
Shares which otherwise would have been issuable pursuant to
the first paragraph of Section 7(a) hereof, which aggregate
value shall be determined by a nationally recognized
investment banking firm selected by a majority of members of
the Board of Directors then in office. For purposes of the
preceding sentence, the value of the Common Shares shall be
determined pursuant to Section 11(d) hereof. Any such
election by the Board of Directors must be made within 60
days following the Distribution Date. Following the
Distribution Date, a majority of the Board of Directors then
in office may suspend the exercisability of the Rights for a
period of up to 60 days following the
9.
Distribution Date to the extent that such directors have not
determined whether to exercise their rights of election
under this paragraph Section 7(a). In the event of any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended.
(b) The purchase price (the "Purchase Price") for each Common
Share (or cash, property, preferred stock of the Company,
other securities or combination thereof substituted therefor
in accordance with the second paragraph of Section 7(a))
pursuant to the exercise of a Right shall initially be
$80.00 and shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be
payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Subject to the second paragraph of Section 7(a), upon
receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase set forth on
the reverse thereof (or a facsimile thereof) and the
Certificate contained therein duly executed, accompanied by
payment of the Purchase Price for the Common Shares (or
cash, property, preferred stock of the Company, other
securities or any combination thereof substituted therefor
in accordance with the second paragraph of Section 7(a)) to
be purchased and an amount equal to any applicable transfer
tax in cash, or by check, bank draft or money order payable
to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent
of the Common Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Common
Shares (or, when appropriate, from the Company cash,
property, preferred stock of the Company, other securities
or any combination thereof) to be purchased and the Company
hereby irrevocably authorizes and directs its transfer agent
to comply with all such requests, (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, (iii) promptly after receipt of such Common
Shares certificates or other cash, property, preferred stock
of the Company, other securities or any combination thereof
substituted therefor in accordance with the second paragraph
of Section 7(a), 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, promptly deliver such cash to or upon the order of
the registered holder of such Rights Certificate.
Notwithstanding the foregoing provisions of this Section
7(c), the Company may suspend the issuance of Common Shares
upon exercise of a Right for a reasonable period, not in
excess of 90 days, during wich the Company seeks to register
under the Securities Act of 1933, as amended, and any
applicable securities law of any other jurisdiction the
Common Shares or other securities to be issued pursuant to
the Rights.
10.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii) hereof, the Rights
Agent shall return such Rights Certificate to the registered
holder thereof after imprinting, stamping or otherwise
indicating thereon that the rights represented by such
Rights Certificate no longer include the rights provided by
Section 11(a)(ii) hereof, and, if fewer than all the Rights
represented by such Rights Certificate were so exercised,
the Rights Agent shall indicate on the Rights Certificate
the number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii) hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder
upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have
(i) completed and signed the certification following the
form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF 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 canceled form, or, if delivered or
surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled
Rights Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
SECTION 9. AVAILABILITY OF COMMON SHARES. Subject to the second paragraph of
Section 7(a), so long as the Common Shares issuable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all Common
Shares to be issued on such exchange upon official notice of
issuance upon such exercise. The Company covenants and agrees
that it will take all such action as may be necessary to ensure
that all Common Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Common Shares
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
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 Common Shares issued
upon the
11.
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 Rights Certificates to a person other
than, or the issuance or delivery of certificates for the Common
Shares in a name other than that of, the registered holder of the
Rights Certificate evidencing Rights surrendered for exercise or
to issue or deliver any certificates for Common Shares upon the
exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
As soon as practicable after the Shares Acquisition Date, the
Company shall use its best efforts to:
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with
respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form,
will use its best efforts to cause such registration
statement to become effective as soon as practicable
after such filing and will use its best efforts to
cause such registration statement to remain
effective (with a prospectus at all times meeting
the requirements of the Act) until the Final
Expiration Date; and
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate.
SECTION 10. COMMON SHARES RECORD DATE. Each person in whose name any
certificate for Common Shares or other securities is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares or other
securities represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered with the forms of election and
certification duly executed and payment of the Purchase Price (and
any applicable transfer taxes) was made; PROVIDED, HOWEVER, that
if the date of such surrender and payment is a date upon which the
Common Shares or other securities transfer books of the Company
are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Common Shares or other
securities transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a
holder of Common Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
12.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of Common Shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)
(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the
Common Shares payable in Common Shares,
(B) subdivide the outstanding Common Shares,
(C) combine the outstanding Common Shares into a
smaller number of Common Shares or (D) issue any
shares of its capital stock in a reclassification of
the Common Shares (including any such
reclassification in connection with a consolidation
or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided
in this Section 11(a), the 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 Common Shares transfer books of the
Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to
any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof and the provisions of
the next paragraph of this Section 11(a)(ii), in the
event any Person, alone or together with any of its
Affiliates and Associates, shall become an Acquiring
Person, each holder of a Right shall, for a period
of 60 days after the later of such time any Person
becomes an Acquiring Person or the effective date of
an appropriate registration statement under the Act
pursuant to Section 9 hereof (PROVIDED, HOWEVER
that, if at any time prior to the expiration or
termination of the Rights there shall be a temporary
restraining order, a preliminary injunction, an
injunction, or temporary suspension by the Board of
Directors, or similar obstacle to
13.
exercise of the Rights (the "Injunction") which
prevents exercise of the Rights, a new 60-day period
shall commence on the date the Injunction is
removed), have a right to receive, upon exercise
thereof at a price equal to the then current
Purchase Price multiplied by the number of Common
Shares for which a Right is then exercisable, in
accordance with the terms of this Agreement, such
number of Common Shares as shall equal the result
obtained by (A) multiplying the then current
Purchase Price by the number of Common Shares for
which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share
market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date such
Person became an Acquiring Person; PROVIDED,
HOWEVER, that if the transaction that would
otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to
this Section 11(a)(ii). In the event that any
Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall
not take any action which would eliminate or
diminish the benefits intended to be afforded by the
Rights.
Notwithstanding anything in this Agreement to the
contrary, from and after the time any Person becomes
an Acquiring Person, any Rights beneficially owned
by (i) such Acquiring Person or an Associate or
Affiliate of such Acquiring Person, (ii) a
transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee
after the Acquiring Person became such, or (iii) a
transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person's
becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has
determined is part of a plan, arrangement or
understanding which has as a primary purpose or
effect the avoidance of this Section 11(a)(ii),
shall become null and void without any further
action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable
efforts to insure that the provisions of this
Section 11(a)(ii) and Section 4(b) hereof are
complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a
result of its failure to make any determinations
with
14.
respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Rights
Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or
Affiliate; and any Rights Certificate delivered to
the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding
sentence shall be canceled.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a
majority of the Board of Directors then in office
determines that such action is necessary or
appropriate and not contrary to the interests of
holders of Rights, elect to (and, in the event that
the Board of Directors has not exercised the
exchange right contained in Section 24(c) hereof and
there are not sufficient treasury shares and
authorized but unissued Common Shares to permit the
exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall)
take all such action as may be necessary to
authorize, issue or pay, upon the exercise of the
Rights, cash (including by way of a reduction of the
Purchase Price), property, preferred stock of the
Company, other securities or any combination thereof
having an aggregate value equal to the value of the
Common Shares which otherwise would have been
issuable pursuant to Section 11(a)(ii) hereof, which
aggregate value shall be determined by a nationally
recognized investment banking firm selected by a
majority of the Board of Directors then in office.
For purposes of the preceding sentence, the value of
the Common Shares shall be determined pursuant to
Section 11(d) hereof. Any such election by the
Board of Directors must be made within 60 days
following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred.
Following the occurrence of the event described in
Section 11(a)(ii) hereof, a majority of the Board of
Directors then in office may suspend the
exercisability of the Rights for a period of up to
60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have
occurred to the extent that such directors have not
determined whether to exercise their rights of
election under this Section 11(a)(iii). In the
event of any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring with 45
calendar days after such record date) to subscribe for or
purchase Common Shares (or shares having the same
designations
15.
and the powers, preferences and rights, and the
qualifications, limitations and restrictions as the Common
Shares ("equivalent common shares")) or securities
convertible into Common Shares or equivalent shares of
preferred stock of the Company at a price per Common Share
or equivalent share of preferred stock of the Company (or
having a conversion price per share, if a security
convertible into Common Shares or equivalent shares of
preferred stock of the Company) less than the then current
per share market price of the Common Shares (as such term is
hereinafter defined) on such record date, the Purchase Price
to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on
such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common
Shares and/or equivalent shares of preferred stock of the
Company 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 Common Shares
outstanding on such record date plus the number of
additional Common Shares and/or equivalent shares of
preferred stock of the Company to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible);
PROVIDED, HOWEVER, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent. Common Shares owned by or held for the
account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Common Shares) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be
the then current per share market price of the Common Shares
(as such term is hereinafter defined) on such
16.
record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Common Share and the
denominator of which shall be such current per share market
price of the Common Shares; PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had
not been fixed.
(d)
(i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i))
on any date shall be deemed to be the average of the
daily closing prices per share of such Security for
the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the
current per share market price of the Security is
determined during a period following the
announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in
shares of such Security or securities convertible
into such shares, or (B) any subdivision,
combination or reclassification of such Security or
securities convertible into such shares, or (C) any
subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or
distribution, or the record date for such
subdivision, combination or reclassification, then,
and in each such case, the current per share market
price shall be appropriately adjusted to reflect the
current market price per share equivalent of such
Security. The closing price for each day shall be
the last sale price, regular way, or, in case no
such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in
either case as reported in the principal
consolidated transaction reporting system with
respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Security
is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal
consolidated transaction reporting system with
respect to securities listed on the principal
national securities exchange on which the Security
is
17.
listed or admitted to trading or as reported on the
Nasdaq National Market or, if the Security is not
listed or admitted to trading on any national
securities exchange or reported on the Nasdaq
National Market, the last quoted price or, if not so
quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported
by the National Association of Securities Dealers,
Inc. Automated Quotations System ("Nasdaq") or such
other system then in use, or, if on any such date
the Security is not quoted by any such organization,
the average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the Security selected by the Board of
Directors of the Company or, if on any such date no
professional market maker is making a market in the
Security, the price as determined in good faith by
the Board of Directors. The term "Trading Day"
shall mean a day on which the principal national
securities exchange on which the Security is listed
or admitted to trading is open for the 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 Common
Shares shall be determined in accordance with the
method set forth in Section 11(d)(i) hereof. If the
Common Shares are not publicly traded, the "current
per share market price" of the Common Shares shall
mean the fair value per share as determined in good
faith by the Board of Directors of the Company,
whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or
to the nearest one ten-thousandth of a Common Share or other
share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Rights thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable
upon exercise of any Rights shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with
18.
respect to the Common Shares contained in Sections 11(a)
through 11(c) hereof, inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the
Common Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase
Price, the number of Common Shares purchasable from time to
time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of
the Purchase Price as a result of the calculations made in
Section 11(b) and Section 11(c) hereof, each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of Common Shares
(calculated to the nearest one ten-thousandth of a Common
Share) obtained by (i) multiplying (x) the number of Common
Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of Common
Shares purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Common
Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 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,
19.
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 so to be 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 Common Shares issuable upon the
exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase
Price and the number of Common Shares 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, if
any, of the Common Shares issuable upon exercise of the
Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid
and nonassessable Common Shares at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Rights exercised after such record date of the
Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing
such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to,
or if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially
diminish or eliminate the benefits intended to be afforded
by the Rights. Any such action taken by the Company during
any period after any Person becomes an Acquiring Person but
prior to the Distribution Date shall be null and void unless
such action could be taken under this Section 11(m) from and
after the Distribution Date.
(n) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the
20.
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of
the Common Shares, issuance wholly for cash of any Common
Shares at less than the current market price, issuance
wholly for cash of Common Shares or securities which by
their terms are convertible into or exchangeable for Common
Shares, dividends on Common Shares payable in Common Shares
or issuance of rights, options or warrants referred to
herein above in Section 11(b), hereinafter made by the
Company to holders of its Common Shares shall not be taxable
to such stockholders.
(o) The exercise of Rights under Section 11(a)(ii) hereof shall
only result in the loss of rights under Section 11(a)(ii)
hereof to the extent so exercised and shall not otherwise
affect the rights represented by the Rights under this
Agreement, including the rights represented by Section 13
hereof.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Shares 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. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Shares Acquisition Date or,
if a Transaction is proposed, the Distribution Date,
directly or indirectly (x) the Company shall consolidate
with, or merge with and into, any Interested Stockholder, or
if in such merger or consolidation all holders of Common
Shares are not treated alike, any other Person, (y) any
Interested Person, or if in such merger or consolidation all
holders of Common Shares are not treated alike, any other
Person shall consolidate with the Company, or merge with and
into the Company, and the Company shall be the continuing or
surviving corporation of such merger (other than, in the
case of either transaction described in (x) or (y), a merger
or consolidation which would result in all of the voting
power represented by the securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into securities of the surviving entity) all of
the voting power represented by the securities of the
Company or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell, mortgage or
otherwise transfer (or one or more of its subsidiaries shall
sell, mortgage or otherwise transfer), in one
21.
or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders, or if in such transaction all
holders of Common Shares are not treated alike, any other
Person, (other than the Company or any Subsidiary of the
Company in one or more transactions each of which
individually and the aggregate does not violate
Section 13(d) hereof) then, and in each such case, proper
provision shall be made so that (i) each holder of a Right,
subject to Section 11(a)(ii) hereof, shall have the right to
receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of
Common Shares for which a Right is then exercisable in
accordance with the terms of this Agreement, such number of
freely tradeable Common Shares of the Principal Party (as
such term is hereinafter defined), free and clear of liens,
rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by
(A) multiplying the then current Purchase Price by the
number of Common Shares for which a Right is then
exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (B) 50% of the then current per
share market price of the Common Shares of such Principal
Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply to such
Principal Party; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Shares in
accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a)
hereof, the Person that is the issuer of any
securities into which Common Shares are converted in
such merger or consolidation, and if no securities
are so issued, the Person that is the other party to
the merger or consolidation (or, if applicable, the
Company, if it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence of Section 13(a) hereof, the
Person that is the party receiving the
22.
greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
PROVIDED, HOWEVER, that in any case, (1) if the Common
Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary or Affiliate of another Person
the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; (2) if
such Person is a subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two
or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate
market value; and (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in
such joint venture as if such party were a "subsidiary" of
both or all of such joint ventures and the Principal Parties
in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized Common Shares that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and each
Principal Party and each other Person who may become a
Principal Party as a result of such consolidation, merger,
sale or transfer shall have (i) executed and delivered to
the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13
and (ii) prepared, filed and had declared and remain
effective a registration statement under the Act on the
appropriate form with respect to the Rights and the
securities exercisable upon exercise of the Rights and
further providing that, as soon as practicable after the
date of any consolidation, merger, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will:
(i) cause the registration statement under the Act with
respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form
to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate;
23.
(iii) list the Rights and the securities purchasable upon
exercise of the Rights on each national securities
exchange on which the Common Shares were listed
prior to the consummation of such consolidation,
merger, sale or transfer, or on the Nasdaq National
Market if the Common Shares were listed on the
Nasdaq National Market or, if the Common Shares were
not listed on a national securities exchange or the
Nasdaq National Market prior to the consummation of
such consolidation, merger, sale or transfer, on a
national securities exchange or the Nasdaq National
Market; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and
each of its Affiliates which comply in all material
respects with the requirements for registration on
Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
(d) After the Distribution Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge
with or into, or (iii) sell or transfer to, in one or more
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
subsidiaries taken as a whole, any other Person (other than
a Subsidiary of the Company in a transaction which does not
violate Section 11(m) hereof), if (x) at the time of or
after such consolidation, merger or sale there are any
charter or bylaw provisions or any rights, warrants or other
instruments or securities outstanding, agreements in effect
or any other action taken which would diminish or otherwise
eliminate the benefits intended to be afforded by the Rights
or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. The Company
shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other
Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this
Section 13(d).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute 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 whole Right shall be the
24.
closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or as
reported on the Nasdaq National Market or, if the Rights are
not listed or admitted to trading on any national securities
exchange or reported on the Nasdaq National Market, the last
quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use or, if
on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In
lieu of fractional Common Shares, 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 Common Share. For the purposes of this
Section 14(b), the current market value of a Common Share
shall be the current per share market price of the Common
Shares (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise (or, if not publicly
traded, in accordance with Section 11(d)(ii) hereof).
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the
right to receive Common Shares, capital stock equivalents or
other securities upon the exercise of a Right, the Company
shall not be required to issue fractions of Common Shares or
units of such Common Shares, capital stock equivalents or
other securities upon exercise of the Rights or to
distribute certificates which evidence fractional Common
Shares, capital stock equivalents or other securities. In
lieu of fractional Common Shares, capital stock equivalents
or other securities, the Company shall pay to the registered
holders of 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 Common
Share or unit of such Common Shares, capital stock
25.
equivalents or other securities. For purposes of this
Section 14(c), the current market value shall be the current
per share market price (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise and, if such capital stock
equivalent is not traded, each such capital stock equivalent
shall have the value of one Common Share.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right (except as
provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights
Agent under Sections 18 and 20 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares) and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of
the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
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
under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this
Agreement. Holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys fees, incurred
by them in any action to enforce the provisions of this Agreement.
SECTION 16. AGREEMENT OF 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 the
Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable (subject to the provisions of this Agreement)
only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to
the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any
26.
notations of ownership or writing on the Rights Certificates
or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
SECTION 17. 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 Common
Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any 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 Rights evidenced by
such Rights Certificate or Rights Certificates 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, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses
of defending against any claim of liability in the premises. The
indemnity provided herein shall survive the expiration of the
Rights and the termination of this Agreement.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in
reliance upon any Rights Certificate or certificate for the Common
Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged,
by the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof. In no case will the
Rights Agent be liable for special, indirect, incidental or
consequential or consequential loss or damage at any kind
whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of such loss or damage.
27.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party,
or any corporation succeeding to the shareholder services or
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement any of the 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 Right Certificates either in the
name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the 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, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its
choice (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, the
28.
Chief Financial Officer, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this
Agreement or in the 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 responsibility in
respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of
any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this
Agreement or in any 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 Sections 3, 11, 13, 23 or 24 hereof, or the
ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after
receipt of a certificate pursuant to Section 12 hereof
describing such change or adjustment); nor shall it by any
act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Common Shares to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any Common Shares will,
when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial
Officer, any Vice President, the Secretary or the Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or
29.
suffered by it in good faith in accordance with instructions
of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement
and the date on and/or after which such action shall be
taken or omitted and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a
proposal included in any such application on or after the
date specified therein (which date shall not be less than
three business days after the date indicated in such
application unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received
written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has not been executed, the
Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first
consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this
Agreement upon 30 days'
30.
notice in writing mailed to the Company and to each transfer agent
for the Common Shares by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer
agent for the Common Shares 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 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 his 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 either (a) a
corporation business trust or limited liability company organized
and doing business under the laws of the United States or of any
other state of the United States which is authorized under such
laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million or
(b) a direct or indirect wholly owned subsidiary of such an entity
or its wholly-owning parent. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent for the
Common Shares, 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 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 Common Shares
following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Company (a)
shall with respect to Common Shares so issued or sold pursuant to
the exercise of stock
31.
options or under any employee plan or arrangement in existence
prior to the Distribution Date, or upon the exercise, conversion
or exchange of securities, notes or debentures issued by the
Company and in existence prior to the Distribution Date, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) the Company
shall not be obligated to issue any such Rights Certificates if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to Section 23(b) hereof and shall not be
redeemed in any other manner.
(b)
(i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of such
time as any Person becoming an Acquiring Person
or the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a
redemption price of $.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
in Common Shares (based on the "current per-share
market price," as such term is defined in
Section 11(d) hereof, of the Common Shares at the
time of redemption), cash or any other form of
consideration deemed appropriate by the Board of
Directors. The redemption of the Rights by the
Board of Directors may be made effective at such
time, on such basis and subject to such conditions
as the Board of Directors in its sole discretion may
establish. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not
be exercisable pursuant to Section 11(a)(ii) hereof
prior to the expiration or termination of the
Company's right of redemption under this Section
23(b)(i).
(ii) In addition, the Board of Directors of the Company
may, at its option, at any time after the time a
Person becomes an Acquiring Person and the
expiration of any period during which the holder of
Rights may exercise the rights under Section
11(a)(ii) hereof but prior to any event described in
clause (x), (y) or (z) of the first
32.
sentence of Section 13 hereof, redeem all but not
less than all of the then outstanding Rights at the
Redemption Price (x) in connection with any merger,
consolidation or sale or other transfer (in one
transaction or in a series of related transactions)
of assets or earning power aggregating 50% or more
of the assets or earning power of the Company and
its subsidiaries (taken as a whole) in which all
holders of Common Shares are treated alike and not
involving (other than as a holder of Common Shares
being treated like all other such holders) an
Interested Stockholder or a Transaction Person or
(y)(A) if and for so long as the Acquiring Person is
not thereafter the Beneficial Owner of 20% or more
of the then outstanding Common Shares, and (B) at
the time of redemption no other Persons are
Acquiring Persons.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to
Section 23(b) hereof, and without any further action and
without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any such
redemption; PROVIDED, HOWEVER, that the failure to give, or
any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights
pursuant to Section 23(b) hereof, the Company shall mail a
notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer
agent for the Common Shares, PROVIDED, HOWEVER, that failure
to give, or any defect in, any such notice shall not affect
the validity of such redemption. Any notice which is mailed
in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or
in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
(d) The Company may, at its option, discharge all of its
obligations with respect to any redemption of the Rights by
(i) issuing a press release announcing the manner of
redemption of the Rights and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at
their last addresses as they appear on the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares,
and upon such action, all outstanding Rights Certificates
shall be null and void without any further action by the
Company.
33.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent;
PROVIDED, HOWEVER, that the failure to give, or any defect
in, such notice shall not affect the validity of such
exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares
for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held
by each holder of Rights.
(c) In lieu of issuing Common Shares in accordance with Section
24(a) hereof, the Company may, if a majority of the Board of
Directors then in office determines that such action is
necessary or appropriate and not contrary to the interests
of the holders of Rights, elect to (and, in the event that
there are not sufficient treasury shares and authorized but
unissued Common Shares to permit any exchange of the Rights
in accordance with Section 24(a) hereof, the Company shall)
take all such action as may be
34.
necessary to authorize, issue or pay, upon the exchange of
the Rights, cash (including by way of a reduction of the
Purchase Price), property, preferred stock of the Company,
other securities or any combination thereof having an
aggregate value equal to the value of the Common Shares
which otherwise would have been issuable pursuant to Section
24(a) hereof, which aggregate value shall be determined by a
nationally recognized investment banking firm selected by a
majority of the Board of Directors then in office. For
purposes of the preceding sentence, the value of the Common
Shares shall be determined pursuant to Section 11(d) hereof.
Any election pursuant to this Section 24(c) by the Board of
Directors must be made within 60 days following the date on
which the event described in Section 11(a)(ii) hereof shall
have occurred. Following the occurrence on the event
described in Section 11(a)(ii) hereof, a majority of the
Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to 60 days
following the date on which the event described in Section
11(a)(ii) hereof shall have occurred to the extent that such
directors have not determined whether to exercise their
rights of election under this Section 24(c). In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights
has been temporarily suspended.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of
the Rights Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this Section 24(d),
the current market value of a whole Common Share shall be
the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately after the date of the first public
announcement by the Company that an exchange is to be
effected pursuant to this Section 24.
(e) The Company shall not be required to issue fractions of
Common Shares upon exchange of the Rights or to distribute
certificates which evidence fractional Common Shares. In
lieu of fractional Common Shares, 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 Common Share. For the purposes of this
Section 24(e), the current market value of a Common Share
shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately after the date of the first
public announcement by the Company that an exchange is to be
effected pursuant to this Section 24.
35.
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 Common
Shares or to make any other distribution to the holders of
its Common Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Common Shares
rights or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of its Common Shares (other than a
reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), to
any other Person, (v) to effect the liquidation, dissolution
or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such
case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date
for the purpose of such stock dividend, or distribution of
rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the
Common Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of
such proposed action or the date of participation therein by
the holders of the Common Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any 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:
36.
Adaptive Broadband Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Client Administration
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 and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the
approval of any holders of the Rights. From and after the
Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, from time to time supplement or amend any
provision of this Agreement without the approval of any holders of
Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or
(iii) change any other provisions with respect to the Rights which
the Company may deem necessary or desirable; PROVIDED, HOWEVER,
that no such supplement or amendment shall be made which would
adversely affect the interests of the holders of Rights (other
than the interests of an Acquiring Person or its Affiliates or
Associates). Any supplement or amendment adopted during any
period after any Person has become an Acquiring Person but prior
to the Distribution Date shall become null and void unless such
supplement or amendment could have been adopted by the Company
from and after the Distribution Date. Any such supplement or
amendment shall be evidenced by a writing signed by the Company
and the Rights Agent. Upon delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good
faith that such supplement or amendment would adversely affect its
interest under this Agreement. Prior to the Distribution Date,
the
37.
interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Shares.
SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For all
purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date of
this Agreement. The Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the
Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and
binding on the Rights Agent and the holders of the Rights, and (y)
not subject the Board to any liability to the holders of the
Rights.
SECTION 29. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the Common Shares).
SECTION 31. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within such State.
38.
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.
39.
IN WITNESS WHEREOF, parties whereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
ADAPTIVE BROADBAND CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Account Manager
-----------------------------------
Exhibit A - Form of Rights Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
40.
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER JUNE 30, 2002 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN OR IF EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS CERTIFICATE
ADAPTIVE BROADBAND 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 21, 1999 (the "Rights Agreement"), between Adaptive
Broadband Corporation, a Delaware corporation (the "Company"), and BankBoston,
N.A. (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., New York City time, on June 30, 2002 at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent, one fully paid, non-assessable share of Common Stock, par value $.10 per
share (the "Common Shares"), of the Company, at a purchase price of $80.00 per
Common Share (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 Common
Shares 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 July 26,
1999 based on the Common Shares as constituted at such date.
From and after the time any Person becomes an Acquiring Person, (as such
terms are defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (1) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (2) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after the Acquiring Person
becomes such or (3) under certain circumstances specified in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or Affiliate who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such, such Rights shall become null and void without any further action and no
holder hereof shall have any right with respect to such Rights from and after
the time any Person becomes an Acquiring Person.
A-1.
As provided in the Rights Agreement, the Purchase Price and the number of
Common Shares 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, as amended from time to time, 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 and the above-mentioned offices of
the Rights Agent.
This Right 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 Common Shares 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 (other than pursuant to Section
11(a)(ii) of the Rights Agreement) in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. If this Rights Certificate shall
be exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Rights Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate (1) may be redeemed by the Company at a redemption price
of $.01 per Right or (2) may be exchanged in whole or in part for Common Shares.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, 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 the Common Shares
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this 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.
A-2.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____________, ____.
ATTEST: ADAPTIVE BROADBAND CORPORATION
By:
------------------------- -----------------------------------
Title:
---------------------------------
Countersigned:
BANKBOSTON, N.A.
By:
-----------------------------
Authorized Signature
A-3.
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 an "eligible guarantor institution"
as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.
----------------------------------------
CERTIFICATION
The undersigned hereby certifies that (1) the Rights evidenced by this
Rights Certificate are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person, an Interested Stockholder or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement); and (2) after due inquiry and to the best of the knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person, an Interested
Stockholder, or an Affiliate or Associate thereof.
-----------------------------
Signature
A-4.
Form of Reverse Side of Rights Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To BankBoston, N.A.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Common Shares be issued in the name of:
Please insert social security or other identifying number:______________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this 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 an "eligible guarantor institution"
as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.
----------------------------------------
A-5.
Form of Reverse Side of Rights Certificate -- continued
CERTIFICATION
The undersigned hereby certifies that (1) the Rights evidenced by this
Rights Certificate are not beneficially owned by nor are they being exercised on
behalf of an Acquiring Person, an Interested Stockholder or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best of the knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Rights Certificate from
any Person who is or was an Acquiring Person, an Interested Stockholder, or an
Affiliate or Associate thereof.
-----------------------------
Signature
A-6.
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this 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.
A-7.
EXHIBIT B
ADAPTIVE BROADBAND CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
The Board of Directors of Adaptive Broadband Corporation adopted a Rights
Agreement dated as of July 21, 1999 (the "1999 Rights Agreement"), between the
Company and BankBoston, N.A. (the "Rights Agent") pursuant to which Board of
Directors of the Company authorized and declared a dividend of one Right for
each share of the Company's Common Stock outstanding at the close of business on
the Record Date and authorized and directed the issuance of one Right with
respect to each share of Common Stock that subsequently becomes outstanding.
Each Right entitles the registered holder to purchase from the Company one
Common Share, of the Company at an initial exercise price of $80.00 per Common
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in the 1999 Rights Agreement. The 1999 Rights
Agreement replaces the Rights Agreement by and between Adaptive Broadband
Corporation (formerly California Microwave, Inc.) and BankBoston, N.A.
(successor to Bank of America, N.T. & S.A.) dated as July 27, 1989, as amended
(the "1989 Rights Agreement"), which expires on July 26, 1999, and shall be
effective upon expiration of the 1989 Rights Agreement.
DETACHMENT AND TRANSFER OF RIGHTS
Initially, the Rights will be evidenced by the stock certificates
representing Common Shares then outstanding, and no separate Right Certificates
will be distributed. Until the earlier to occur of (i) a public announcement
that a person or group of affiliated or associated persons, has become an
"Acquiring Person" (as such term is defined in the 1999 Rights Agreement) or
(ii) 10 business days (or such later date as the Board may determine) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer which would result in the beneficial ownership by an Acquiring
Person of 20% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate. In general, an "Acquiring Person" is a
person, the affiliates or associates of such person, or a group, which has
acquired beneficial ownership of 20% or more of the outstanding Common Shares.
The 1999 Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferable
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the 1999 Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights) the
surrender or transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As
B-1.
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
EXERCISABILITY OF RIGHTS
The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 30, 2002 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable or payable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution. The number of
outstanding Rights and the number of Common Shares issuable upon exercise of
each Right are also subject to adjustment in the event of a stock split of the
Common Shares or a stock dividend on the Common Shares payable in Common Shares,
or subdivisions, consolidations or combinations of the Common Shares occurring,
in any such case, prior to the Distribution Date. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
Common Shares will be issued and in lieu thereof, an adjustment in cash will be
made based on the market price of the Common Shares on the last trading day
prior to the date of exercise.
TRIGGER OF FLIP-IN AND FLIP-OVER RIGHTS
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person or any
affiliate or associate thereof (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right. This right will
commence on the date of public announcement that a person has become an
Acquiring Person (or the effective date of a registration statement relating to
distribution of the rights, if later) and terminate 60 days later (subject to
adjustment in the event exercise of the rights is enjoined).
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person, its affiliates or associates or certain
other persons in which such persons have an interest, proper provision will be
made so that each such holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right.
REDEMPTION AND EXCHANGE OF RIGHTS
B-2.
At any time prior to the earliest of (i) the close of business on the day
of the first public announcement that a person has become an Acquiring Person,
or (ii) the Final Expiration Date, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). In general, the redemption of the Rights may be made
effective at such time on such basis with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
At any time after any Person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become void), in whole
or in part, at an exchange ratio of one Common Share, or, under circumstances
set forth in the 1999 Rights Agreement, cash, property or other securities of
the Company, per Right (with value equal to such Common Shares).
AMENDMENT OF RIGHTS
The terms of the Rights generally may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights, except that
from and after such time as the Rights are distributed no such amendment may
adversely affect the interests of the holders of the Rights (excluding the
interest of any Acquiring Person).
ADDITIONAL INFORMATION
A copy of the 1999 Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated July 21,
1999. A copy of the 1999 Rights Agreement is available from the Company by
writing to: Legal Department, Adaptive Broadband Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. This summary description of the Rights is not
intended to be complete and is qualified in its entirety by reference to the
1999 Rights Agreement, which is hereby incorporated herein by reference.
B-3.