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EXHIBIT 99.11
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (this "Agreement"),
dated as of November 15, 2000 is effective as of the Effective Time (as defined
herein), between Continental Airlines, Inc., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services, LLC, a New Jersey limited
liability company (the "Rights Agent").
WHEREAS, the Company and ▇▇▇▇▇▇ Trust and Savings Bank, an
Illinois banking corporation (the "Predecessor Rights Agent"), were parties to
that certain Rights Agreement dated as of November 20, 1998, as amended by the
First Amendment, dated as of February 8, 2000 (such agreement, as so amended,
the "Rights Agreement").
WHEREAS, the Rights Agent has agreed to act as Rights Agent
under this Agreement effective as of the Effective Time.
WHEREAS, in connection with the adoption of the Rights
Agreement, the Board of Directors of the Company had authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share of
Class A Common Stock, par value $.01 per share, of the Company (the "Class A
Common Shares"), Class B Common Stock, par value $.01 per share, of the Company
(the "Class B Common Shares"), and Class D Common Stock, par value $.01 per
share, of the Company (the "Class D Common Shares") outstanding at the Close of
Business on December 2, 1998 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), or such different amount or kind of securities as is herein provided
upon the terms and subject to the conditions herein set forth, and had further
authorized and directed the issuance of one Right with respect to each
additional Class A Common Share, Class B Common Share and Class D Common Share
that shall become outstanding
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between the Record Date and the earlier of the Distribution Date, the Redemption
Date and the Final Expiration Date (as such terms are hereinafter defined).
WHEREAS, the Company, Northwest Airlines Corporation, a
Delaware corporation ("NW Parent"), Northwest Airlines Holdings Corporation,
("NW Holdings"), Northwest Airlines, Inc., a Minnesota corporation, and Air
Partners, L.P., a Texas limited partnership ("Air Partners"), have entered into
that certain Omnibus Agreement dated as of November 15, 2000 (the "Omnibus
Agreement").
WHEREAS, the terms of the Omnibus Agreement require the
Company to amend the Rights Agreement to reflect the transactions contemplated
by the Omnibus Agreement and to effectuate certain provisions thereof.
WHEREAS, pursuant to the Amended and Restated Certificate of
Incorporation of the Company to be filed with the Secretary of State of the
State of Delaware as contemplated by the Omnibus Agreement (the "Amended and
Restated Certificate of Incorporation"), each Class A Common Share, issued
immediately prior to the effectiveness of the Amended and Restated Certificate
of Incorporation (the "Effective Time") will be reclassified, changed and
converted into 1.32 Class B Common Shares (such reclassification of the Class A
Common Shares, the "Reclassification") and all references to the Class D Common
Shares will be deleted.
WHEREAS, this Agreement has been approved by the Required
Board Vote (as hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
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Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall, after the
Announcement Date, be or become the Beneficial Owner of Common Shares
representing 15% or more of the Voting Power of the Common Shares of the Company
then outstanding (or, if such Person is an Institutional Investor (as such term
is hereinafter defined), more than the Permitted Percentage (as such term is
hereinafter defined)). Notwithstanding the foregoing, no Person shall be or
become an Acquiring Person (1) if such Person is an Exempt Person (so long as
such Person remains an Exempt Person), (2) as the result of (a) an acquisition
of Common Shares by the Company or (b) the application of Article Six of the
Amended and Restated Certificate of Incorporation and related provisions of the
Company's bylaws, which, by reducing the number or Voting Power of shares
outstanding, increases the Voting Power of the shares beneficially owned by such
Person to 15% or more of the Voting Power of the Common Shares of the Company
then outstanding (or, if such Person is an Institutional Investor, more than the
Permitted Percentage); provided, however, that if a Person shall so become the
Beneficial Owner of Common Shares representing 15% or more of the Voting Power
of the Common Shares of the Company then outstanding (or, if such Person is an
Institutional Investor, more than the Permitted Percentage) by reason of the
acquisition of Common Shares by the Company or the application of Article Six of
the Amended and Restated Certificate of Incorporation and related provisions of
the Company's bylaws, and shall, after such share purchases by the Company or
such application, purchase or otherwise take action to cause it to become the
Beneficial Owner of Common Shares representing an additional 1% of the Voting
Power of the Common Shares of the Company then outstanding (or, if such Person
is an Institutional Investor, at least
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100,000 additional Common Shares), then such Person shall be an Acquiring
Person, or (3) 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, has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this paragraph, then such Person shall not be an
Acquiring Person for any purposes of this Agreement. Notwithstanding any of the
foregoing, in the event that the Board of Directors determines in good faith
that a Person no longer meets the requirements set forth in the definition of
"Institutional Investor," then such Person shall as promptly as practicable
divest itself of a sufficient number of Common Shares so that such Person
beneficially owns Common Shares representing less than 15% of the Voting Power
of the Common Shares then outstanding. If the Board of Directors determines in
good faith that such Person does not divest itself of Common Shares in
accordance with the requirements set forth in the prior sentence, then such
Person shall be or become an "Acquiring Person" for any and all purposes of this
Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement.
"Air Partners" shall have the meaning set forth in the
recitals hereof.
"Amended and Restated Certificate of Incorporation" shall have
the meaning set forth in the recitals hereof.
"Announcement Date" shall mean November 20, 1998, the date on
which the declaration of a dividend of one Right for each Class A Common Share
and Class B Common Share then outstanding was first announced publicly.
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A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the satisfaction of
one or more conditions) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), written or
otherwise, or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be the Beneficial Owner of, or beneficially own,
securities tendered pursuant to a tender or exchange offer made pursuant to, and
in accordance with, the applicable rules and regulations promulgated under the
Exchange Act by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange; (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be the Beneficial
Owner of, or beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule l3D under the Exchange Act (or any comparable or
successor report); or (C) "beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement); or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), written or
otherwise, for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to section (B) of the immediately preceding
paragraph (ii)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
"B/C/P Group" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, III, or any Person with respect to which one or more of them (i)
directly or indirectly controls at least 50.1% of the voting power, (ii)
directly or indirectly controls at least 50.1% of the equity, or (iii) directly
or indirectly controls in a manner substantially similar to the control that the
general partner of Air Partners had over Air Partners pursuant to and as
provided in the "Partnership Agreement" (as defined in the Investment
Agreement), which Persons described in clause (iii) shall include 1998 CAI
Partners, L.P., a Texas limited partnership, under its partnership agreement and
ownership structure in effect on November 20, 1998.
"Board of Directors" means the board of directors of the
Company.
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"Business Day" shall mean any day other than a Saturday,
Sunday, holiday or a day on which banking institutions in the City of Houston or
the State of Illinois are authorized or obligated by law or executive order to
close.
"Cash Payment" shall have the meaning set forth in Section
11(o) hereof.
"Class A Common Shares" shall have the meaning set forth in
the recitals hereof.
"Class B Common Shares" shall have the meaning set forth in
the recitals hereof.
"Close of Business" on any given date shall mean 5:00 p.m.,
Central time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., central time, on the next succeeding
Business Day.
"Common Shares" when used with reference to the Company shall
mean the Class B Common Shares. "Common Shares" when used with reference to any
Person other than the Company (or, in the event of a transaction referred to in
Section 13 hereof, if the Company is the surviving corporation or the successor
when thereafter used with reference to the Company) shall mean the capital stock
(or equity interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
"common stock equivalents" shall have the meaning set forth in
Section 11(a)(iii)(B)(3) hereof.
"Current Value" shall have the meaning set forth in Section
11(a)(iii)(A)(1) hereof.
"Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
"Effective Time" shall have the meaning set forth in the
recitals hereof.
"equivalent preferred shares" shall have the meaning set forth
in Section 11(b) hereof.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
"Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or any
Subsidiary of the Company, (iv) any entity holding Common Shares for or pursuant
to the terms of any such employee benefit plan, (v) the B/C/P Group, and (vi)
any Person who, as a result of a transfer of (or an agreement to transfer)
Common Shares by any member of the B/C/P Group, becomes the beneficial owner of
Common Shares representing 15% or more of the Voting Power of the Company then
outstanding; provided that such Person shall not have acquired Beneficial
Ownership of Common Shares in addition to those acquired from any member of the
B/C/P Group other than with the Required Board Vote.
"Exercise Price" shall have the meaning set forth in Section
7(b).
"Final Expiration Date" shall mean November 20, 2008.
"Institutional Investor" shall mean a Person who, as of
January 31, 2000, was the Beneficial Owner of Common Shares representing more
than 14% of the Voting Power of the Common Shares then outstanding and had a
Schedule 13G on file with the Securities and Exchange Commission pursuant to the
requirements of Rule 13d-1 under the Exchange Act with respect to such holdings
("Schedule 13G"), so long as such Person (i) is principally engaged in the
business of managing investment funds for unaffiliated securities investors and,
as part of such Person's duties as agent for fully managed accounts, holds or
exercises voting or dispositive power over Common Shares of the Company, (ii)
such Person acquires Beneficial Ownership of Common Shares of the Company
pursuant to trading activities undertaken in the ordinary course of such
Person's business and not with the purpose nor the effect, either alone or in
concert with
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any Person, of exercising the power to direct or cause the direction of the
management and policies of the Company or of otherwise changing or influencing
the control of the Company, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to
Rule 13d-3(b) of the Exchange Act and (iii) if such Person is a Person included
in Rule 13d-1(b)(1)(ii) of the Exchange Act, such Person is not obligated to,
and does not, file a Schedule 13D with respect to the securities of the Company.
"Investment Agreement" shall mean the Investment Agreement
dated as of January 25, 1998 among NW Parent, NW Holdings, Air Partners, the
partners of Air Partners signatory thereto, Bonderman Family Limited
Partnership, 1992 Air, Inc. and Air Saipan, Inc. as amended by Amendment No. 1
dated February 27, 1998 and Amendment No. 2 dated as of November 20, 1998.
"NW Holdings" shall have the meaning set forth in the recitals
hereof.
"NW Parent" shall have the meaning set forth in the recitals
hereof.
"Omnibus Agreement" shall have the meaning set forth in the
recitals hereof.
"Permitted Percentage" shall mean, with respect to an
Institutional Investor, (a) through December 31, 2001, 47% of the Common Shares
of the Company then outstanding (the "Maximum Percentage") and (b) after
December 31, 2001, at any given date (a "Determination Date"), the lesser of (i)
the Maximum Percentage and (ii) the lowest percentage of the outstanding Common
Shares of the Company beneficially owned by the Institutional Investor as set
forth in or derived from any Schedule 13G filed by the Institutional Investor
after December 31, 2001 and prior to the Determination Date with respect to its
beneficial ownership of Common Shares; provided, however, in no event shall the
Permitted Percentage be less than 25% of the Common Shares of the Company then
outstanding.
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"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability partnership, business trust,
limited liability company, unincorporated association, or joint venture or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"Predecessor Rights Agent" shall have the meaning set forth in
the recitals hereof.
"Preferred Shares" shall mean the shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company.
"Reclassification" shall have the meaning set forth in the
recitals hereof.
"Record Date" shall have the meaning set forth in the recitals
hereof.
"Redemption Date" shall mean the date on which the Rights are
redeemed as provided in Section 23 hereof.
"Redemption Price" shall mean $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend, or similar transaction
occurring after the date hereof.
"Required Board Vote" shall mean approval of an action by the
Board of Directors by the affirmative vote of two-thirds of the members of the
Board of Directors voting on the action.
"Right Certificate" shall mean a certificate evidencing a
Right in substantially the form of Exhibit B hereto.
"Rights Agent" shall have the meaning set forth in the
recitals hereof.
"Rights Agreement" shall have the meaning set forth in the
recitals hereof.
"Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Section 13 Trigger Date" shall have the meaning set forth in
Section 13 hereof.
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"Shares Acquisition Date" shall mean the earlier of the date
of (i) the public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such or (ii) the public disclosure of facts by the
Company or an Acquiring Person indicating that an Acquiring Person has become
such.
"Spread" shall have the meaning set forth in Section
11(a)(iii)(A) hereof.
"Subsidiary" of any Person shall mean any Person of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.
"Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Summary of Rights" shall mean the Summary of Rights to
Purchase Preferred Shares in substantially the form of Exhibit C to the Rights
Agreement.
"Voting Power" shall mean the total number of votes entitled
to be cast by the holders of the Common Shares of the Company then outstanding
taking into account the operation of Article Six of the Amended and Restated
Certificate of Incorporation and related provisions of the Company's bylaws.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents, as
it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co rights Agent.
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Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the
tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of any Person (other than any of the
Persons referred to in the preceding parenthetical) to commence (unless such
Person publicly announces within five (5) Business Days that it no longer
intends to commence), a tender or exchange offer the consummation of which could
result in any Person becoming an Acquiring Person (such earlier date being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates other than for purposes of this
Section 3 and any provision of this Agreement referring to the issuance or
distribution of Right Certificates) and not by separate Right Certificates, and
(y) the Rights (and the right to receive Right Certificates) will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Company has notified the Rights Agent of the occurrence of
the Distribution Date, the Company will prepare and execute, (and, if at such
time, the Rights Agent is not also the Company's transfer agent, provide the
Rights Agent with a list of stockholders (together with all other necessary
information)), the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send at the expense
of the Company) by first-class, insured, postage-prepaid mail (or such other
method of delivery selected by the Company), to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate
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evidencing one Right for each Common Share so held (subject to adjustment as
provided in this Agreement). As of the Close of Business on the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) The Rights Agent will mail to any holder of the Right
Certificates a copy of this Agreement without charge to the holder but at the
expense of the Company after receipt of a written request therefor. With respect
to certificates representing Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof. Until the Distribution Date (or
the earlier of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the Common Shares
evidenced 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 Effective Time 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 substantially the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights (the "Rights") as set forth in the Amended
and Restated Rights Agreement between Continental Airlines,
Inc. and ChaseMellon Shareholder Services, LLC, dated as of
November 15, 2000 as it may from time to time be amended or
supplemented pursuant to its terms (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference. A copy of the Rights Agreement is on file at the
principal executive offices of Continental Airlines, Inc.
Under certain circumstances set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. ChaseMellon
Shareholder Services, LLC will mail to the holder of this
certificate a
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copy of the Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances, rights
beneficially owned by any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) and certain other
Persons 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 canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares that are no
longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate, provided that such marks, legends, summaries and endorsements do
not affect the rights, duties or responsibilities of the Rights Agent and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the other
provisions of this Agreement, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a Preferred Share as
shall be set forth therein at the Exercise Price, but the number of one
one-thousandths of a Preferred Share and the Exercise Price shall be subject to
adjustment as provided herein.
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Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature; shall have affixed
thereto the Company's seal or a facsimile thereof; and shall be attested by the
Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Agent shall countersign the Right Certificates,
either manually or by facsimile signature, and the Right Certificate shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nonetheless be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date and receipt by the Rights
Agent of all relevant information, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, books for registration of the
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
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Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the earliest of the Redemption Date, the Close of Business on the Final
Expiration Date, or the time at which the Rights are exchanged as provided in
Section 24 hereof, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a Preferred Share as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate until the registered
holder shall have properly completed and signed the certificate contained in the
form of assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient for any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
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Right Certificates. The Rights Agent shall have no duty or obligation under this
Section 6 or any other similar provision of this Agreement unless and until it
is satisfied that all such taxes and/or governmental charges have been paid in
full.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
or the Rights Agent's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights.
(a) The registered holder of any Right Certificate
(other than a holder whose Rights have become void pursuant to Section 11(a)(ii)
hereof) may exercise the Rights evidenced thereby in whole or in part at any
time after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly executed, to
the Rights Agent at its office designated for such purpose, together with
payment of the Exercise Price for each one one-thousandth of a Preferred Share
as to which the Rights are exercised, prior to the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the right to
exercise the Rights terminates pursuant to Section 23 hereof, or (iii) the time
at which such Rights are exchanged as provided in Section 24 hereof.
(b) The purchase price for each one one-thousandth of
a Preferred Share to be purchased upon the exercise of a Right shall initially
be Two Hundred Dollars ($200) (the
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"Exercise Price"), shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof, and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and certificate duly
executed, accompanied by payment of the Exercise Price for the number of one
one-thousandths of a Preferred Share to be purchased and an amount equal to any
applicable tax or governmental charge required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of one one-thousandths of a
Preferred Share to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) requisition from any
depositary agent for the Preferred Shares depositary receipts representing such
number of one one-thousandths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when necessary to comply with this Agreement, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional Preferred Shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when necessary to comply with this
Agreement, after receipt, deliver the cash described in clause (iii) above to or
upon the order of the registered holder of such Right Certificate.
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(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing the unexercised Rights shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 6 and Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate following
the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
(f) The Rights Agent shall have no liability to any
holder of Rights or any other Person as a result of the Company's failure to
make any determination under this Section 7 or any other section with respect to
an Acquiring Person or an Affiliate or Associate of an Acquiring Person or
transferees hereunder.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
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acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Status and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Exercise
Price), be duly and validly authorized and issued and fully paid and
non-assessable shares.
(b) The Company further covenants and agrees that it
will pay when due and payable any and all taxes and governmental charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise; or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender); or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
(c) The Company covenants and agrees that it will
cause to be reserved and kept available, out of its authorized and unissued
Preferred Shares or any Preferred Shares held
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in its treasury, the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights in accordance with Section
7 hereof.
Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes have become the holder of record of the Preferred Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Exercise Price (and any applicable transfer taxes or governmental charges)
was made. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number of Shares or
Number of Rights. The Exercise Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Exercise
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
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number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right.
(ii) Subject to the following paragraph of
this subparagraph (ii) and to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person, each holder of a Right shall thereafter
have a right to receive, upon exercise thereof at a price equal to the then
current Exercise Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of such number of Preferred Shares for which
a Right is then exercisable, such number of Common Shares as shall equal the
result obtained by (x) multiplying the then current Exercise Price by the number
of one one-thousandths of a Preferred Share for which a Right was or would have
been exercisable (if the Rights had been exercisable) as of immediately prior to
such Person becoming an Acquiring Person and dividing that product by (y) 50% of
the then current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date such Person became an Acquiring
Person. In the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action that
would eliminate or diminish the benefits intended to be afforded by the Rights.
From and after the occurrence of such an event, any Rights
that are or were acquired or beneficially owned by such Acquiring Person (or any
Associate or Affiliate of such Acquiring
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Person) on or after the earlier of (x) the date of such event and (y) the
Distribution Date, shall be void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this Agreement. No
Right Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the preceding sentence or any Associate, Affiliate or transferee thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof shall
be canceled.
(iii) In the event that the number of Common
Shares which are authorized by the Company's certificate of incorporation and
not outstanding or subscribed for, or reserved or otherwise committed for
issuance for purposes other than upon exercise of the Rights, are not sufficient
to permit the holder of each Right to purchase the number of Common Shares to
which he would be entitled upon the exercise in full of the Rights in accordance
with subparagraph (ii) of paragraph (a) of this Section 11, or should the Board
of Directors so elect, the Company shall: (A) determine the excess of (1) the
value of the Common Shares issuable upon the exercise of a Right (calculated as
provided in the last sentence of this subparagraph (iii)) pursuant to Section
11(a)(ii) hereof (the "Current Value") over (2) the Exercise Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon payment of the applicable Exercise
Price, any one or more of the following having an aggregate value determined by
the Board of Directors to be equal to the Current Value: (1) cash; (2) a
reduction in the Exercise Price; (3) Preferred Shares or other equity securities
of the Company
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(including, without limitation, shares, or units or fractions of shares, of
preferred stock which the Board of Directors has determined to have the same
value as the Common Shares (such shares of preferred stock, "common stock
equivalents")); (4) debt securities of the Company; or (5) other assets;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
first occurrence of an event triggering the rights to purchase Common Shares
described in Section 11(a)(ii) (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Exercise Price, shares of Common
Shares (to the extent available) and then, if necessary, cash, which shares and
cash have an aggregate value equal to the Spread. If the Board of Directors
shall determine in good faith that it is likely that sufficient additional
shares of Common Shares could be authorized for issuance upon exercise in full
of the Rights, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof and the last paragraph of Section 11(a)(ii) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall make a public announcement, and shall promptly deliver to the Rights Agent
a statement, stating that the exercisability of the Rights has been
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temporarily suspended. At such time as the suspension is no longer in effect,
the Company shall make another public announcement, and promptly deliver to the
Rights Agent a statement, so stating. For purposes of this Section 11(a)(iii),
the value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d)(i) hereof) of the Common Shares on the
Section 11(a)(ii) Trigger Date and the value of any common stock equivalent
shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, powers and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Exercise Price to be in effect after such record date shall be
adjusted by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
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event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a reasonably detailed
statement filed with the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Preferred Shares (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Exercise Price to be
in effect after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be described
in a reasonably detailed statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Exercise Price shall again be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to, but not
including, such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares, or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the
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Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i). If the
Preferred Shares are not publicly traded, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by 1000. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a reasonably detailed statement filed with the Rights Agent.
(e) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the Exercise Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made
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shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one ten-millionth of a Preferred Share or one ten-thousandth of any
other share or security as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made
no later than three (3) years from the date of the transaction that requires
such adjustment.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, the number of such other shares so receivable upon exercise of
any Right shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder shall evidence
the right to purchase, at the adjusted Exercise Price, the number of one
one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Exercise
Price as a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
one one-thousandths of a Preferred Share (calculated to the nearest one
ten-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-thousandths of a share covered by a
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Right immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights in substitution
for any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one millionth) obtained by dividing the Exercise
Price in effect immediately prior to adjustment of the Exercise Price by the
Exercise Price in effect immediately after adjustment of the Exercise Price. The
Company shall make a public announcement (with prompt written notice thereof to
the Rights Agent) of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been distributed, shall be at least ten (10) days later than the date of the
public announcement. If Right Certificates have been distributed, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon
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surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates to be so distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Exercise Price or the number of one one-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price and the number of
one one-thousandths of a Preferred Share, which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below one one-thousandth of the then par
value of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer (with prompt
written notice thereof to the Rights Agent) until the occurrence of such event
the issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument
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evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares or (v) issuance of any rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares or (ii) effect
a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise other than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such case
(i) the number of one one-thousandths of a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-thousandths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
Voting Power of the number of Common Shares outstanding immediately before such
event and the denominator of which is the Voting Power of the number of Common
Shares outstanding immediately after such event, and (ii) each Common Share
outstanding immediately after such
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event shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(o) Each Class B Common Share that becomes
outstanding as a result of the Reclassification shall have one Right attached
thereto. Upon the Effective Time, the Rights that were previously attached to
the Class A Common Shares outstanding immediately prior to the Effective Time
shall become void. From and after the Effective Time, the (A) outstanding stock
certificates registered in the name of each record holder thereof and the
Summary of Rights attached thereto and (B) outstanding stock certificates
containing the legend contemplated by Section 3 hereof registered in the name of
each record holder thereof, which, in either case, prior to the Effective Time,
represented outstanding Class A Common Shares and an equal number of Rights
shall represent (1) a number of whole Class B Common Shares equal to 1.32 times
the number of Class A Common Shares such certificates represented immediately
prior to the Effective Time rounded down to the nearest whole share, (2) an
equal number of whole Rights and (3) the right of the record holder thereof to
receive, in lieu of fractional Class B Common Shares, the Cash Payment (as
defined in the Amended and Restated Certificate of Incorporation), until such
certificates are presented to the Company or its transfer agent for transfer or
reissue, in which event the Company or its transfer agent shall issue (y) stock
certificates containing the legend contemplated by Section 3 hereof representing
the appropriate number of whole Class B Common Shares into which the Class A
Common Shares were reclassified as a result of the Reclassification and an equal
number of whole Rights and (y) the Cash Payment.
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Section 12. Certificate of Adjustment. Whenever an adjustment
is made as provided in Sections 11 or 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief, reasonably
detailed statement of the facts, computations and methodology accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent for
the Preferred Shares or the Common Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained, and shall not be
obligated or responsible for calculating any adjustment, nor shall it be deemed
to have a duty with respect to nor knowledge of such an adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event that, at any time after a Person becomes
an Acquiring Person, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries (the date of any such event, a "Section 13 Trigger Date"), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter have the right to
receive,
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upon the exercise thereof at a price equal to the then current Exercise Price
multiplied by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares for which a Right is then exercisable, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Exercise Price by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of such other Person (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company covenants and agrees that it shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall
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similarly apply to successive mergers or consolidations or sales or other
transfers. For purposes hereof, the "earning power" of the Company and its
Subsidiaries shall be determined in good faith by the Company's Board of
Directors on the basis of the operating earnings of each business operated by
the Company and its Subsidiaries during the three (3) fiscal years preceding the
date of such determination (or, in the case of any business not operated by the
Company or any Subsidiary during three (3) full fiscal years preceding such
date, during the period such business was operated by the Company or any
Subsidiary).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid
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and low asked prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions that are integral multiples
of one one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares. Fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to each registered holder of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share as the fraction of
one Preferred Share that such holder would otherwise receive upon the exercise
of the aggregate number of Rights exercised by such holder. For the purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise multiplied by 1000.
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(c) The holder of a Right by the acceptance of the
Right expressly waives any right to receive fractional Rights or fractional
shares upon exercise of a Right except as provided above.
(d) The Rights Agent shall have no duty or obligation
with respect to this Section 14 or any other Section hereof concerning
fractional shares unless and until it has received specific instructions (and
sufficient cash, if required) from the Company with respect to its duties and
obligations under such Sections.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 or Section 20 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may,
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), on his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would 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.
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Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books maintained by the
Rights Agent if surrendered at the office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer
with a properly completed form of certification;
(c) the Company and the Rights Agent may treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining
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performance of such obligation; provided, however, that the Company must use its
reasonable best efforts to have any such order, decree, judgment or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, legal fees and disbursements incurred in the preparation, delivery,
acceptance, administration, execution and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent, and its officers, agents and directors for, and to
hold each of them harmless against, any loss, liability, damage, judgment,
ruling (interlocutory or final), fine, penalty, claim, demand, settlement, cost
or expense, incurred without gross negligence, bad faith or willful misconduct
(as finally determined by a court of competent jurisdiction) on the part of
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the Rights Agent, for any action taken, suffered or omitted by the Rights Agent
or such indemnified party in connection with the acceptance or administration of
this Agreement or the exercise or performance of its duties hereunder,
including, without limitation, the costs and expenses of defending against any
claim of liability in the premises. The indemnity provided for herein shall
survive the termination and expiration of the Rights, the termination and
expiration of this Agreement, and the resignation or removal of the Rights
Agent. The costs and expenses of successfully enforcing this right of
indemnification shall also be paid by the Company.
The Rights Agent may conclusively rely upon and shall be
protected by the Company and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. The
Rights Agent shall not be deemed to have any duty or notice unless and until the
Company has provided the Rights Agent with actual written notice.
Notwithstanding anything in this Agreement to the contrary, in
no event shall the Rights Agent be liable for special, punitive, incidental,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action. Any
liability of the Rights Agent under this Agreement shall be limited to $50,000;
provided,
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however, with respect to liability arising from the bad faith or willful
misconduct of the Rights Agent, the liability of the Rights Agent shall not be
so limited.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all
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such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this Agreement upon
the following terms and conditions, and no implied duties or obligations shall
be read into this Agreement against the Rights Agent, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, the Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the General Counsel, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct (as finally
determined by a court of competent jurisdiction).
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be liable for, nor be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it have any liability for nor
be responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor shall it
have any liability for, nor be responsible for any adjustment required under
Sections 11 or 13 hereof or for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other
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acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept advice or instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, any Executive Vice
President, the General Counsel, the Managing Attorney -- Corporate and the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such advice or instructions
shall be full authorization to the Rights Agent and the Rights Agent shall incur
no liability for or in respect of any action taken, suffered or omitted to be
taken by it in good faith in accordance with the advice or instructions of any
such officer. Any application by the Rights Agent for written advice or
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken, suffered or omitted by the Rights
Agent under this Rights Agreement and the date on or after which such action
shall be taken, suffered by or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, suffered by or omission of,
the Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be less
than five (5) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written advice or instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the
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Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, default, neglect or misconduct.
(j) Except as otherwise provided herein, the Rights
Agent shall not be required to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder or in
the exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) The Rights Agent shall not be required to take
notice or be deemed to have notice of any fact, event or determination
(including, without limitation, any dates or events defined in this Agreement or
the designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the Rights Agent shall be specifically
notified in writing by the Company of such fact, event or determination.
(l) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has not been properly completed, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first
consulting with the Company.
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Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by registered
or certified mail and, at the expense of the Company, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (i) a
Person organized and doing business under the laws of the United States, in good
standing, which is authorized under such laws to conduct shareholder services
business and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million dollars or (ii) a
subsidiary of a Person described in clause (i) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
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named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and the Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) Subject to the applicable provisions, if any, in
the Company's certificate of incorporation, at any time prior to the time any
Person becomes an Acquiring Person, the Board of Directors may, by the Required
Board Vote, redeem all but not less than all of the then outstanding Rights at
the Redemption Price. The redemption of the Rights by the Board of Directors may
be made effective at such time, on such basis and subject to such conditions as
the Board of Directors in its sole discretion may establish. The Company may, at
its option, pay the Redemption Price in cash, Common Shares (based on the market
price thereof, as determined by
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the Board of Directors) or other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23 (or on such other later date, or upon satisfaction of such
conditions, as shall be specified in the resolution of the Board of Directors
approving such redemption), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly notify the Rights Agent in writing of such redemption
and shall give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within ten (10) days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph (a), the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. If the payment of the Redemption Price is not included with
such notice, each such notice shall state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, other than in connection with the purchase of Common Shares
prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any
time after any
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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, any entity holding Common Shares for or pursuant to the
terms of any such plan or any Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of Common Shares
representing a majority of the Voting Power then outstanding.
(b) Immediately upon the action of the Board of
Directors ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange (with prompt
written notice thereof to the Rights Agent); provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of the
exchange. The Company promptly shall mail a notice of the exchange to the Rights
Agent and to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected and, in the event
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of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Shares or common stock
equivalents for Common Shares exchangeable for Rights, at the initial rate of
one one-thousandth of a Preferred Share (or an appropriate number of common
stock equivalents) for each Common Share, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient
Common Shares, Preferred Shares or common stock equivalents authorized by the
Company's certificate of incorporation and not outstanding or subscribed for, or
reserved or otherwise committed for issuance for purposes other than upon
exercise of Rights, to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional Common Shares, Preferred Shares or common
stock equivalents for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an amount in
cash equal to the same fraction of the current per share market value of a whole
Common Share. For the purposes of this paragraph (e), the current per share
market value of a whole Common Share
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shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall, after the Distribution
Date, propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or warrants to subscribe for
or to purchase any additional Preferred Shares or shares of stock of any class
or any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
-52-
53
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least ten (10) days prior to the
record date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least ten (10) days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as practicable thereafter
give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences of such event to
holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Continental Airlines, Inc.
Dept. HQS-EO
Continental Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary and General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sent by registered or
certified mail and shall be deemed given upon receipt and addressed (until
another address is filed in writing with the Company) as follows:
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54
ChaseMellon Shareholder Services, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Relationship Manager
with a copy to:
ChaseMellon Shareholder Services, LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Subject to the
applicable provisions, if any, in the Company's certificate of incorporation,
the Company may, by the Required Board Vote, from time to time, and the Rights
Agent shall, if the Company directs, supplement or amend this Agreement without
the approval of any holders of Right Certificates to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any change to or
delete any provision hereof or to adopt any other provisions with respect to the
Rights which the Company may deem necessary or desirable; provided, however,
that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended or supplemented in any manner which would
adversely affect the interests of the holders of Rights (other than an Acquiring
Person and its Affiliates and Associates). Notwithstanding anything contained in
this Agreement to the contrary, no supplement or amendment to this Rights
Agreement shall be made which reduces the Redemption Price, provides for an
earlier Final Expiration Date, alters the provisions of Section 23(a) relating
to the redemption
-54-
55
of the Rights, or extends the time during which the Rights may be redeemed if,
in any such case, at the time of such supplement or amendment the Rights are not
redeemable.
Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights, duties, liabilities and
obligations of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
-55-
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Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties, obligations and liabilities of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Administration. The Board of Directors shall have
the exclusive power and authority to administer and interpret the provisions of
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or the Company or as may be necessary or advisable in the
administration of this Agreement. All such actions, calculations, determinations
and interpretations which are done or made by the Board of Directors in good
faith shall be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other Person and shall not subject the Board
of Directors to any liability to the holders of the Rights. The Rights Agent
shall always be entitled to assume that the Board of Directors acted in good
faith and shall incur no liability in reliance thereof. Promptly following the
Effective Time,
-56-
57
the Company shall file an amendment to the certificate of designation of the
Preferred Shares to reflect the changes made to the Company's capital structure
as a result of the Reclassification.
-57-
58
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
CONTINENTAL AIRLINES, INC.
Attest:
By: By:
----------------------------- ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary Executive Vice President General
Counsel and Secretary
CHASEMELLON SHAREHOLDER
SERVICES, LLC, as rights agent
Attest:
By: By:
----------------------------- ---------------------------------
Name: Name:
------------------------ -----------------------------
Title: Title:
----------------------- ----------------------------
[Signature Page to Rights Agreement]
59
CONTINENTAL AIRLINES, INC.
And
CHASEMELLON SHAREHOLDER SERVICES, LLC
Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of November 15, 2000
60
TABLE OF CONTENTS
Section 1. Certain Definitions........................................................................ 3
Section 2. Appointment of Rights Agent................................................................ 11
Section 3. Issue of Right Certificates................................................................ 12
Section 4. Form of Right Certificates................................................................. 14
Section 5. Countersignature and Registration.......................................................... 15
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.......................................................... 16
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.............................. 17
Section 8. Cancellation and Destruction of Right Certificates......................................... 19
Section 9. Status and Availability of Preferred Shares................................................ 20
Section 10. Preferred Shares Record Date............................................................... 21
Section 11. Adjustment of Exercise Price, Number of Shares or Number of Rights......................... 21
Section 12. Certificate of Adjustment.................................................................. 34
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power....................... 34
Section 14. Fractional Rights and Fractional Shares.................................................... 36
Section 15. Rights of Action........................................................................... 38
Section 16. Agreement of Right Holders................................................................. 39
Section 17. Right Certificate Holder Not Deemed a Stockholder.......................................... 40
Section 18. Concerning the Rights Agent................................................................ 40
Section 19. Merger or Consolidation or Change of Name of Rights Agent.................................. 42
Section 20. Duties of Rights Agent..................................................................... 43
Section 21. Change of Rights Agent..................................................................... 47
Section 22. Issuance of New Right Certificates......................................................... 48
Section 23. Redemption................................................................................. 48
Section 24. Exchange................................................................................... 49
Section 25. Notice of Certain Events................................................................... 52
Section 26. Notices.................................................................................... 53
Section 27. Supplements and Amendments................................................................. 54
Section 28. Successors................................................................................. 55
Section 29. Benefits of this Agreement................................................................. 55
Section 30. Severability............................................................................... 55
Section 31. Governing Law.............................................................................. 56
Section 32. Counterparts............................................................................... 56
Section 33. Descriptive Headings....................................................................... 56
Section 34. Administration............................................................................. 56
61
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
CONTINENTAL AIRLINES, INC.
----------
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------
Continental Airlines, Inc., a Delaware corporation (the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
Delaware General Corporation Law at a meeting duly called and held on November
16, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation (the "Restated
Certificate of Incorporation"), the Board of Directors hereby creates a series
of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Section 1. Designation and Amount. The shares of this series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 100,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
62
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any other stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount (if any) per share (rounded to the
nearest cent), subject to the provision for adjustment hereinafter set forth,
equal to 1000 times the aggregate per share amount of all cash dividends, and
1000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
Class B Common Stock, par value $.01 per share (the "Class B Common Stock") or
Class D Common Stock, par value $.01 per share (the "Class D Common Stock" and,
together with the Class A Common Stock and the Class B Common Stock, the "Common
Stock"), of the Corporation or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock).
(C) Dividends due pursuant to paragraph (A) of this
Section shall begin to accrue and be cumulative on outstanding shares of Series
A Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A
A-2
63
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of votes entitled to be cast by the holders
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of votes entitled to be cast by the holders
of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided in the Amended and
Restated Certificate of Incorporation, including any other Certificate of
Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
required by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
A-3
64
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled; or
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock; provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A Preferred Stock.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
The Corporation shall take all such actions as are necessary to cause all such
shares to become authorized but unissued shares of Preferred Stock that may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein or in the Restated Certificate of
Incorporation, including any Certificate of Designation creating a series of
Preferred Stock or any similar stock, or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, the holders of shares
of Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of shares
of Common Stock plus an amount equal to any accrued and unpaid dividends. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth,
A-4
65
equal to 1000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. Amendment. The Restated Certificate of
Incorporation shall not be amended in any manner, including in a merger or
consolidation, which would alter, change, or repeal the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a single
class.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and upon liquidation, dissolution and
winding up, junior to all series of Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its duly authorized officer this ______
day of November, 1998.
CONTINENTAL AIRLINES, INC.
By:
-----------------------------
Name:
Title:
A-5
66
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____________Rights
NOT EXERCISABLE AFTER NOVEMBER 20, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT (AS DEFINED HEREIN). UNDER
CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR
AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
Right Certificate
CONTINENTAL AIRLINES, INC.
This certifies that _______________________ , or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, dated as of November
15, 2000 (the "Rights Agreement"), between Continental Airlines, Inc., a
Delaware corporation (the "Company"), and ChaseMellon Shareholder Services, LLC
(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
the earliest of (i) 5:00 P.M., central time, on November 20, 2008, (ii) the
Redemption Date (as such term is defined in the Rights Agreement), or (iii) the
time at which such Rights are exchanged pursuant to Section 24 of the Rights
Agreement, at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.01 per share
("Preferred Shares"), of the Company, at a purchase price of $200 per one
one-thousandth of a Preferred Share (the "Exercise Price"), upon presentation
and surrender of this Right Certificate with the certification and the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Exercise Price
set forth above, are the number and Exercise Price as of November 20, 1998,
based on the
67
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Exercise Price and the number of one one-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
From and after the occurrence of an event described in Section
11(a)(ii) of the Rights Agreement, if the Rights are or were at any time on or
after the earlier of (x) the date of such event and (y) the Distribution Date
(as such term is defined in the Rights Agreement) acquired or beneficially owned
by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as
such terms are defined in the Rights Agreement), such Rights shall become void,
and any holder of such Rights shall thereafter have no right to exercise such
Rights.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the offices of the Rights Agent and will be mailed to the holder
of the Right Certificates, without charge, after receipt of a written request
therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, at the
Company's option, the Rights evidenced by this Certificate (i) may be redeemed
by the Company at a redemption price of $.001 per Right or (ii) may be exchanged
in whole or in part for shares of the Company's Class B Common stock, par value
$.01 per share, or Preferred Shares.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions that are
integral multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of
B-2
68
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of .
-------------------
CONTINENTAL AIRLINES, INC.
Attest:
By:
--------------------------------------- ---------------------------
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, LLC
Rights Agent
By:
----------------------------------
Authorized Signature
B-3
69
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________________ hereby sells,
assigns and transfers unto
--------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
---------- -------
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-----------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
---------------------------------------------
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70
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To: CONTINENTAL AIRLINES, INC.:
The undersigned hereby irrevocably elects to exercise
______________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------
-------------------------------------------------------------
Dated: ,
---------------- ------
-------------------------------
Signature
Signature Guaranteed:
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71
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
---------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
---------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6