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EXHIBIT 4.2
FORM OF RIGHTS AGREEMENT
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RIGHTS AGREEMENT
dated as of February 17, 1999
by and between
▇▇▇▇▇▇▇▇ INCORPORATED
and
▇▇▇▇▇▇ TRUST COMPANY OF CALIFORNIA
as Rights Agent
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions................................................. 4
Section 2. Appointment of Rights Agent......................................... 9
Section 3. Issuance of Rights Certificates..................................... 9
Section 4. Form of Right Certificates..........................................11
Section 5. Countersignature and Registration...................................11
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates........................................................12
Section 7. Exercise of Rights..................................................12
Section 8. Cancellation and Destruction of Right Certificates..................14
Section 9. Reservation and Availability of Capital Stock.......................14
Section 10. Securities Record Date..............................................15
Section 11. Adjustment of Exercise Price, Number of Shares Issuable
Upon Exercise of Rights or Number of Rights........................15
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights...................................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power......................................................21
Section 14. Fractional Rights and Fractional Shares............................23
Section 15. Rights of Action...................................................24
Section 16. Agreement of Right Holders.........................................24
Section 17. Right Holder and Right Certificate Holder Not Deemed a
Stockholder........................................................25
Section 18. Concerning the Rights Agent........................................25
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TABLE OF DEFINED TERMS
(continued)
Section Term Defined Page
------- ------------ ----
Section 19. Merger or Consolidation or Change of Name of Rights Agent..........26
Section 20. Duties of Rights Agent.............................................26
Section 21. Change of Rights Agent.............................................28
Section 22. Issuance of New Right Certificates.................................29
Section 23. Redemption of Rights...............................................29
Section 24. Exchange of Rights.................................................30
Section 25. Notice of Certain Events...........................................31
Section 26. Notices............................................................32
Section 27. Supplements and Amendments.........................................33
Section 28. Certain Covenants..................................................33
Section 29. Successors.........................................................33
Section 30. Benefits of this Agreement.........................................33
Section 31. Severability.......................................................34
Section 32. Governing Law......................................................34
Section 33. Counterparts.......................................................34
Section 34. Descriptive Headings...............................................34
TABLE OF EXHIBITS
Exhibit A -- Form of Right Certificate
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RIGHTS AGREEMENT
This Rights Agreement (the "Agreement") is made and entered
into as of the 17th day of February, 1999 by and between ▇▇▇▇▇▇▇▇ INCORPORATED,
a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ TRUST COMPANY OF CALIFORNIA,
a trust company organized under the laws of the State of California, as rights
agent (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding on March 3, 1999 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions set forth herein, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Expiration Date
(as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act, as in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated under
the Exchange Act, in each case as in effect on the date hereof;
(ii) that such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is
exercisable immediately, or only after the passage of time,
compliance with regulatory requirements, the fulfillment of a
condition or otherwise) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange
rights (other than these Rights), rights, warrants or options, or
otherwise, provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, securities tendered
pursuant to a tender offer or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange;
(iii) that such Person or any such Person's Affiliates or
Associates has the right to vote, whether alone or in concert with
others, pursuant to any agreement, arrangement
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or understanding, provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own, any security
if the agreement, arrangement or understanding to vote such security
(A) arises solely from a revocable proxy given to such Person or any
of such Person's Affiliates or Associates in response to a public
proxy solicitation made pursuant to and in accordance with the
applicable rules and regulations promulgated under the Exchange Act,
and (B) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(iv) that 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 for the purpose of acquiring, holding, voting (other
than voting pursuant to a revocable proxy as described in the proviso
to clause (iii) of this definition of "Beneficial Owner") or
disposing of any securities of the Company; and
(v) that, on any day on or after the Distribution Date,
evidence Rights that prior to such date were represented by
certificates for Common Shares that such Person Beneficially Owns on
such day.
Notwithstanding anything to the contrary in this Section l(b), a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of, or to Beneficially Own, any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the States of California or
Illinois are authorized or obligated by law or executive order to close.
"Certificate of Designations" shall mean the certificate of
designations specifying the powers, designations, preferences and rights of the
Preferred Shares in accordance with the Delaware General Corporation Law.
"Close of Business" on any given date shall mean 5:00 p.m.,
California time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 p.m., California time, on the next succeeding
Business Day.
"Closing Price" of a stock or other security on any day
shall be the last sale price, regular way, per share of such stock or unit of
such other security on such day 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 such stock or other 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 such stock or other security
is listed or admitted to trading or, if such stock or other 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
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asked prices in the over-the-counter market, as reported on the Nasdaq
National Market ("NASDAQ") or such other system then in use or, if on any such
date such stock or other security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker that makes a market in such stock or other security and that is
selected by the Board of Directors of the Company.
"Common Share" shall mean one share of the Common Stock,
par value $.01 per share, of the Company, unless used with reference to a Person
other than the Company, in which case it shall mean one share of each class of
stock of such Person having the right to vote generally in the election of
directors or, if such Person is a Subsidiary of another Person, one Common Share
of the Person that ultimately controls such Person.
"Common Share Equivalent" shall have the meaning ascribed
to it in Section 11(a)(iii) hereof.
"Current Market Price" per share of a stock or unit of any
other security on any date shall mean the average of the daily Closing Prices of
such stock or other security for the 30 consecutive Trading Days through and
including the Trading Day immediately preceding the date in question; provided,
however, that if any event shall have caused the Closing Price on any Trading
Day during such 30-day period not to be fully comparable with the Closing Price
on the date in question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in question), then
each such non-comparable Closing Price so used shall be appropriately adjusted
by the Board of Directors in order to make the Closing Price on each Trading Day
during the period used for the determination of the Current Market Price fully
comparable with the Closing Price on such date in question (or, if applicable,
the immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
"Distribution Date" shall have the meaning ascribed to it
in Section 3 hereof.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Exempt Person" shall mean the Company, any wholly-owned
Subsidiary of the Company, any employee benefit plan of the Company or of a
Subsidiary of the Company and any Person holding Voting Shares for or pursuant
to the terms of any such employee benefit plan.
"Exercise Price" shall have the meaning ascribed to it in
Section 7(c) hereof.
"Expiration Date" shall mean February 17, 2009.
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"15% Ownership Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or a 15% Stockholder containing the facts by virtue of which a Person
has become a 15% Stockholder.
"15% Stockholder" shall mean any Person that Beneficially
Owns 15% or more of the Voting Shares of the Company then outstanding; provided,
however, that the term "15% Stockholder" shall not include: (i) an Exempt
Person; (ii) any Person that would not otherwise be a 15% Stockholder but for a
reduction in the number of outstanding Voting Shares resulting from a stock
repurchase program or other similar plan of the Company or from a self tender
offer of the Company, which plan or tender offer commenced on or after the date
hereof; provided, however, that the term "15% Stockholder" shall include such
Person from and after the first date upon which (A) such Person, since the date
of the commencement of such plan or tender offer, shall have acquired Beneficial
Ownership of, in the aggregate, a number of Voting Shares of the Company equal
to 1% or more of the Voting Shares of the Company then outstanding and (B) such
Person, together with all Affiliates and Associates of such Person, shall
Beneficially Own 15% or more of the Voting Shares of the Company then
outstanding; (iii) any Person that would not otherwise be a 15% Stockholder but
for its Beneficial Ownership of Rights; (iv) any Person that is the Beneficial
Owner of 15% or more of the outstanding Voting Shares of the Company as of
February 17, 1999; provided, however, that the term "15% Stockholder" shall
include such Person from and after the first date upon which (A) such Person,
since February 17, 1999, shall have acquired, without the prior approval of the
Board of Directors of the Company, Beneficial Ownership of, in the aggregate, a
number of Voting Shares of the Company equal to 1% or more of the Voting Shares
of the Company then outstanding and (B) such Person, together with all
Affiliates and Associates of such Person, shall Beneficially Own 15% or more of
the Voting Shares of the Company then outstanding; or (v) any Person (a
"Transferee") that acquires Voting Shares from a Person described in clause (iv)
above that has not become a 15% Stockholder if, after giving effect to such
acquisition, such Transferee Beneficially Owns no more than the sum of the
Voting Shares so acquired plus 1% of the Voting Shares then outstanding;
provided, however, that the term "15% Stockholder" shall include such Transferee
from and after the first date upon which (A) such Transferee, since the date of
such acquisition, shall have acquired, without the prior approval of the Board
of Directors of the Company, Beneficial Ownership of, in the aggregate, a number
of Voting Shares of the Company equal to 1% or more of the Voting Shares of the
Company then outstanding and (B) such Transferee, together with all Affiliates
and Associates of such Transferee, shall Beneficially Own 15% or more of the
Voting Shares of the Company then outstanding. In calculating the percentage of
the outstanding Voting Shares that are Beneficially Owned by a Person for
purposes of this definition, Voting Shares that are Beneficially Owned by such
Person shall be deemed outstanding, and Voting Shares that are not Beneficially
Owned by such Person and that are subject to issuance upon the exercise or
conversion of outstanding conversion rights, exchange rights, rights, warrants
or options shall not be deemed outstanding. Any determination made by the Board
of Directors of the Company as to whether any Person is or is not a 15%
Stockholder shall be conclusive and binding upon all holders of Rights.
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"Person" shall mean any individual, firm, partnership,
corporation, association, group (as such term is used in Rule 13d-5 promulgated
under the Exchange Act as in effect on the date hereof) or other entity, and
shall include any successor (by merger or otherwise) of such entity.
"Preferred Share" shall mean one share of the Series C
Junior Participating Cumulative Preferred Stock, par value $.01 per share, of
the Company, which shall have the rights and preferences set forth in the
Certificate of Designations for the Preferred Shares.
"Preferred Share Equivalent" shall have the meaning
ascribed to it in Section 11(b) hereof.
"Record Date" shall have the meaning ascribed to it in the
recitals hereto.
"Redemption Date" shall mean the date of the action of the
Board of Directors of the Company authorizing and directing the redemption of
the Rights pursuant to Section 23(a) hereof or the exchange of the Rights
pursuant to Section 24(a) hereof.
"Redemption Price" shall have the meaning ascribed to it in
Section 23(a) hereof.
"Right Certificate", as that term is used with respect to
any period prior to the Distribution Date, shall have the meaning ascribed to it
in Section 3(b) hereof, and, as that term is used with respect to any period on
or after the Distribution Date, shall have the meaning ascribed to it in Section
3(c) hereof.
"Rights Expiration Date" shall mean the Expiration Date,
except if there has been a Distribution Date, then it shall mean the tenth
anniversary of the Distribution Date.
"Section 11(a)(ii) Event" shall have the meaning ascribed
to it in Section 11(a)(ii) hereof.
"Section 13(a) Event" shall have the meaning ascribed to it
in Section 13(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subsidiary" of any Person shall mean any corporation or
other Person of which equity securities or equity interests representing a
majority of the voting power are owned, directly or indirectly, or which is
effectively controlled, by such Person.
"Surviving Person" shall have the meaning ascribed to it in
Section 13(a) hereof.
"Trading Day" shall mean, as to any stock or other
security, a day on which the principal national securities exchange on which
such stock or other security is listed or admitted to trading is open for the
transaction of business or, if such stock or other security is not listed or
admitted to trading on any national securities exchange, a Business Day.
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"Voting Share" shall mean (i) a Common Share of the Company
and (ii) any other share of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. References in this Agreement to a percentage or portion of the outstanding
Voting Shares shall be deemed a reference to the percentage or portion of the
total votes entitled to be cast by the holders of the outstanding Voting Shares.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) "Distribution Date" shall mean the date, after the date
hereof, that is the earliest of (i) the tenth Business Day (or such later day as
shall be designated by the Board of Directors of the Company) following the date
of the commencement of, or the first public announcement of the intent of any
Person, other than an Exempt Person, to commence a tender offer or exchange
offer, the consummation of which would cause any Person to become a 15%
Stockholder, (ii) the date of the first Section 11(a)(ii) Event or (iii) the
date of the first Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be
represented by certificates for Common Shares (all of which certificates for
Common Shares shall be deemed to be Right Certificates) and not by separate
Right Certificates, (ii) the record holder of the Common Shares represented by
each of such certificates shall be the record holder of the Rights represented
thereby and (iii) the Rights shall be transferable only in connection with the
transfer of Common Shares. Until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, the surrender for transfer of such
certificates for Common Shares shall also constitute the surrender for transfer
of the Rights represented thereby.
(c) As soon as practicable after the Distribution Date, and
after notification by the Company, the Rights Agent shall send, at the expense
of the Company, by first-class, postage-prepaid mail to each record holder of
Common Shares, as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate
substantially in the form of Exhibit A hereto representing one Right for each
Common Share so held. From and after the Distribution Date, the Rights shall be
represented solely by such Right Certificates and may only be transferred by the
transfer of such Right Certificates, and the holders of such Right Certificates,
as listed in the records of the Company or any transfer agent or registrar for
such Rights, shall be the record holders of such Rights.
(d) Certificates for Common Shares issued at any time after
the Record Date and prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date,
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shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of
February 17, 1999 by and between ▇▇▇▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇
Trust Company of California, as Rights Agent (the "Rights
Agreement"), as amended to date, the terms and conditions of which
are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Ducommun Incorporated.
Under certain circumstances specified in the Rights Agreement, such
Rights will be represented by separate certificates and will no
longer be represented by this certificate. Under certain
circumstances specified in the Rights Agreement, Rights beneficially
owned by certain persons may become null and void. ▇▇▇▇▇▇▇▇
Incorporated will mail to the record holder of this certificate a
copy of the Rights Agreement without charge promptly following
receipt of a written request therefor. As described in the Rights
Agreement, Rights Beneficially Owned by any Person who becomes a 15%
Stockholder or any Affiliate or Associate of a 15% Stockholder (as
such capitalized terms are defined in the Rights Agreement) shall
become null and void.
(e) Certificates for Common Shares issued at any time on or
after the Distribution Date and prior to the earlier of the Redemption Date or
the Rights Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the
terms of a Rights Agreement dated as of February 17, 1999 by and
between Ducommun Incorporated and ▇▇▇▇▇▇ Trust Company of California,
as Rights Agent.
(f) In the event that at any time on or after the earlier
of the date of the first Section 11(a)(ii) Event or the date of the first
Section 13(a) Event and prior to the earlier of the Redemption Date or the
Rights Expiration Date, the Company shall issue any Common Shares pursuant to
the exercise of conversion rights, exchange rights, rights (other than Rights),
warrants or options that shall have been issued or granted prior to the earlier
of the date of the first Section 11(a)(ii) Event or the date of the first
Section 13(a) Event, then, unless the Board of Directors of the Company shall
have provided otherwise at the time of the issuance or grant of such conversion
rights, exchange rights, rights (other than Rights), warrants or options, the
Rights Agent shall, as soon as practicable after the date of such event, send by
first-class, postage-prepaid mail to the record holder of such Common Shares, at
the address of such holder as shown on the records of the Company, a Right
Certificate substantially in the form of Exhibit A hereto representing one Right
for each Common Share so issued.
(h) Notwithstanding the foregoing provisions of this
Section , the Rights Agent shall not send any Right Certificate to any 15%
Stockholder or any of its Affiliates or Associates or to any Person if the
Rights held by such Person are Beneficially Owned by a
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15% Stockholder or any of its Affiliates or Associates. Any determination made
by the Board of Directors of the Company as to whether any Common Shares are or
were Beneficially Owned at any time by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder shall be conclusive and binding upon all holders
of Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates and the
form of assignment, including certificate, and the form of election to purchase,
including certificate, printed on the reverse thereof, when, as and if issued,
shall be substantially the same as Exhibit A hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange upon which the Rights or the securities
of the Company issuable upon exercise of the Rights may from time to time be
listed, or to conform to usage. Subject to Section 22 hereof, Right
Certificates, whenever issued, that are issued in respect of Common Shares that
were issued and outstanding as of the Close of Business on the Distribution
Date, shall be dated as of the Distribution Date.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its Vice Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature, and
may have affixed thereto the Company's seal or a facsimile thereof attested by
its Secretary or any Assistant Secretary, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless 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 nevertheless 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. Any
Right Certificate may be signed on behalf of the Company by any person who at
the actual date of such execution shall be a proper officer of the Company to
sign such Right Certificate, even though such person was not such an officer at
the date of the execution of this Agreement.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept at its principal offices books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of Right Certificates, the number
of Rights represented on its face by each Right Certificate and the date of each
Right Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14
hereof, at any time after the Close of Business on the Distribution Date, and so
long as the Rights represented
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thereby remain outstanding, any one or more Right Certificates may be
transferred, split-up, combined or exchanged for one or more Right Certificates
representing the same aggregate number of Rights as the Right Certificates
surrendered. Any registered holder desiring to transfer, split up, combine or
exchange one or more Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
with the form of assignment, including certificate, on the reverse side thereof
completed and duly executed, with signature guaranteed. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto one or more
Right Certificates, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(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
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 such Right Certificate if mutilated, the Company shall issue and
deliver to the Rights Agent for delivery to the record holder of such Right
Certificate a new Right Certificate of like tenor in lieu of such lost, stolen,
destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this
Section 6, the Rights Agent shall not countersign and deliver a Right
Certificate to any Person if such Right Certificate represents, or would
represent when held by such Person, Rights that had become or would become null
and void pursuant to Section 7(d) hereof.
SECTION 7. EXERCISE OF RIGHTS.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other
provisions of this Agreement, at any time after the Close of Business on the
Distribution Date and prior to the Close of Business on the earlier of the
Redemption Date or the Rights Expiration Date, the registered holder of any
Right Certificate may exercise the Rights represented thereby in whole or in
part upon surrender of such Right Certificate, with the form of election to
purchase, including certificate, on the reverse side thereof completed and duly
executed, with signature guaranteed, to the Rights Agent at the office of the
Rights Agent at ▇▇▇▇▇▇ Trust Company of California, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, together with payment of the Exercise
Price for each Right exercised. Upon the exercise of an exercisable Right and
payment of the Exercise Price in accordance with the provisions of this
Agreement, the holder of such Right shall be entitled to receive, subject to
adjustment as provided herein, one one-hundredth of a Preferred Share (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or other securities).
(c) The "Exercise Price" for the exercise of each Right
shall initially be $60.00 and shall be payable in lawful money of the United
States of America in accordance with
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Section 7(f) hereof. The Exercise Price and the number of Preferred Shares (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or other securities) to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 7(e),
11 and 13 hereof and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the
contrary, from and after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event, any Rights that are or were
Beneficially Owned by a 15% Stockholder or any Affiliate or Associate of a 15%
Stockholder at any time on or after the Distribution Date shall be null and
void, and for all purposes of this Agreement such Rights shall thereafter be
deemed not to be outstanding, and any holder of such Rights (whether or not such
holder is a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder)
shall thereafter have no right to exercise such Rights.
(e) Prior to the Distribution Date, if the Board of
Directors of the Company shall have determined that such action adequately
protects the interests of the holders of Rights, the Company may, in its
discretion, substitute for all or any portion of the Preferred Shares that would
otherwise be issuable (after the Close of Business on the Distribution Date)
upon the exercise of each Right and payment of the Exercise Price (i) cash, (ii)
other equity securities of the Company, (iii) debt securities of the Company,
(iv) other property or (v) any combination of the foregoing, in each case having
an aggregate Current Market Price equal to the aggregate Current Market Price of
the Preferred Shares for which substitution is made. Subject to Section 7(d)
hereof, in the event that the Company takes any action pursuant to this Section
7(e), such action shall apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase, including
certificate, completed and duly executed, with signature guaranteed, accompanied
by payment of the Exercise Price for each Right to be exercised and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by certified check or
cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from the transfer agent of the Preferred
Shares (or, following the occurrence of a Section 11(a)(ii) Event or a Section
13(a) Event, Common Shares and/or securities) certificates for the number of
Preferred Shares (or such other securities) to be purchased, and the Company
hereby irrevocably authorizes such transfer agent to comply with all such
requests, and/or, as provided in Section 14 hereof, requisition from the
depositary agent described therein depositary receipts representing such number
of one-hundredths of a Preferred Share (or such other securities) as are to be
purchased (in which case certificates for the Preferred Shares (or such other
securities) represented by such receipts shall be deposited by the transfer
agent with such depositary agent) and the Company hereby directs such depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
Preferred Shares (or such other securities) in accordance with Section 14
hereof, (iii) after receipt of such certificates, depositary receipts or cash,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or
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names as may be designated by such holder and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of the registered holder
of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this
Section 7, the exercisability of the Rights shall be suspended for such period
as shall reasonably be necessary for the Company to register and qualify under
the Securities Act and any applicable securities law of any jurisdiction the
Preferred Shares and/or Common Shares or other securities to be issued pursuant
to the exercise of the Rights; provided, however, that nothing contained in this
Section 7 shall relieve the Company of its obligations under Section 9(c)
hereof.
(h) In case the registered holder of any Right Certificate
shall exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
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
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to Sections 7(e) and 9(f) hereof, the Company
shall cause to be reserved and kept available out of its authorized and unissued
equity securities (or out of its authorized and issued equity securities held in
its treasury), the number of such equity securities that will from time to time
be sufficient to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise
of the Rights are listed on any national securities exchange, the Company shall
use its best efforts, from and after such time as the Rights become exercisable,
to cause all such securities issued or reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon
exercise of the Rights, the Company shall use its best efforts, from and after
the Distribution Date, to register and qualify such securities under the
Securities Act, the Exchange Act and any other applicable securities laws and to
keep such registration effective until the earlier of the Redemption Date or the
Rights Expiration Date.
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(d) The Company shall take all such action as may be
necessary to ensure that all securities delivered upon exercise of the Rights
shall, at the time of delivery of the certificates for such securities (subject
to payment of the Exercise Price), be duly and validly authorized and issued and
fully paid and nonassessable securities.
(e) The Company shall pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of any securities upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax that may be payable in respect of any transfer or delivery of a
Right Certificate to a Person other than, or the issuance or delivery of a
certificate for securities in respect of a name other than that of, the
registered holder of the Right Certificate representing Rights surrendered for
exercise, or to issue or deliver any certificate for securities upon the
exercise of any Right until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
(f) With respect to the Common Shares and/or other
securities issuable pursuant to Section 11(a)(ii) and (iii) hereof, the
foregoing covenants shall be applicable only upon and following the occurrence
of a Section 11(a)(ii) Event.
SECTION 10. SECURITIES RECORD DATE. Each Person in whose name any
certificate for securities of the Company is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
securities represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate representing such Rights was duly surrendered
and payment of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the securities transfer books of the Company are closed, such person shall
be deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
securities transfer books of the Company are open.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE
UPON EXERCISE OF RIGHTS OR NUMBER OF RIGHTS. The Exercise Price, the number and
kind of securities that may be purchased upon exercise of a 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 that the Company shall at any time
after the Close of Business on the Record Date and prior to the Close
of Business on the earlier of the Redemption Date or the Rights
Expiration Date (A) declare or pay any dividend on the Preferred
Shares payable in Preferred Shares or Voting Shares, (B) subdivide
the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issue Preferred Shares or other securities of the Company (other than
those for which an adjustment is required under Section 11(b) hereof)
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) or in a
reorganization of the Company, then, and upon each such event, the
number and kind of Preferred Shares or other securities issuable upon
the exercise of a
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Right on the date of such event shall be proportionately adjusted so
that the holder of any Right exercised on or after such date shall be
entitled to receive, upon the exercise thereof and payment of the
Exercise Price, the aggregate number and kind of Preferred Shares or
other securities or other property, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a time
when such Right was exercisable and the transfer books of the Company
were open, such holder would have owned upon such exercise and would
have been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that
would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that a 15% Ownership Date shall have
occurred and neither the Redemption Date nor the Expiration Date
shall have occurred prior to the tenth Business Day following such
15% Ownership Date (a "Section 11(a)(ii) Event"), then, and upon each
such Section 11(a)(ii) Event, proper provision shall be made so that,
except as provided in Section 7(d) hereof, each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof
in accordance with the terms of this Agreement and payment of the
then current Exercise Price, such number of Common Shares of the
Company as shall equal the result obtained by (A) multiplying the
then current Exercise Price by the then number of one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior
to such Section 11(a)(ii) Event (or, if the Distribution Date shall
not have occurred prior to the date of such Section 11(a)(ii) Event,
the number of one-hundredths of a Preferred Share for which a Right
would have been exercisable if the Distribution Date had occurred on
the Business Day immediately preceding the date of such Section
11(a)(ii) Event), and (B) dividing that product by 50% of the Current
Market Price of a Common Share on the date of occurrence of the
relevant Section 11(a)(ii) Event (such number of shares being
hereinafter referred to as the "Adjustment Shares"). Successive
adjustments shall be made pursuant to this paragraph each time a
Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii)
Event the aggregate number of Common Shares that are authorized by
the Company's Certificate of Incorporation, as amended from time to
time, but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is less than the aggregate number of
Adjustment Shares thereafter issuable upon the exercise in full of
the Rights in accordance with Section 11(a)(ii) hereof (the excess of
such number of Adjustment Shares over and above such number of Common
Shares being hereinafter referred to as the "Unavailable Adjustment
Shares"), then, and upon each such event, the Company shall
substitute for the pro rata portion of the Unavailable Adjustment
Shares that would otherwise be issuable thereafter upon the exercise
of each Right and payment of the Exercise Price (A) cash, (B) other
equity securities of the Company (including, without limitation,
shares of preferred stock of the Company or units of such shares
having the same Current Market Price as one Common Share (a "Common
Share Equivalent")), (C) debt securities of the Company, (D) other
property or (E) any combination of the
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foregoing, in each case having an aggregate Current Market Price
equal to the aggregate Current Market Price of the Unavailable
Adjustment Shares for which substitution is made. Subject to Section
7(d) hereof, in the event that the Company takes any action pursuant
to this Section 11(a)(iii), such action shall apply uniformly to all
outstanding Rights.
(b) In the event that the Company shall, at any time after
the Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Rights Expiration Date, fix a record
date for the issuance of rights, options or warrants to all holders of Preferred
Shares entitling them initially to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the Preferred
Shares ("Preferred Share Equivalents")) or securities convertible into Preferred
Shares or Preferred Share Equivalents, at a price per Preferred Share or
Preferred Share Equivalent (or having a conversion price per share, if a
security convertible into Preferred Shares or Preferred Share Equivalents) less
than the Current Market Price per Preferred Share on such record date, then, and
upon each such event, 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 equal
to the sum of the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and/or Preferred Share Equivalents to be so
offered (and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such Current Market Price, and
the denominator of which shall be equal to the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or Preferred Share Equivalents to be offered for subscription or purchase
(or into which the convertible securities to be so offered are initially
convertible); provided, however, that if such rights, options or warrants are
not exercisable immediately upon issuance but become exercisable only upon the
occurrence of a specified event or the passage of a specified period of time,
then the adjustment to the Exercise Price shall be made and become effective
only upon the occurrence of such event or such passage of time, and such
adjustment shall be made as if the record date for the issuance of such rights,
options or warrants had been the Business Day immediately preceding the date
upon which such rights, options or warrants became exercisable. 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 to the Exercise Price
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Exercise Price shall
be adjusted to be the Exercise Price that would then be in effect if such record
date had not been fixed.
(c) In the event that the Company shall, at any time after
the Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Rights Expiration Date, 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 surviving corporation) of assets (other than
a distribution for which an adjustment is required under Section 11(a)(i) or (b)
hereof or a regular quarterly cash dividend), then 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
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fraction, the numerator of which shall be equal to the excess of the Current
Market Price per Preferred Share on such record date over and above the fair
market value of the portion of the securities or assets to be so distributed
with respect to one Preferred Share, and the denominator of which shall be equal
to such Current Market Price per Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such a
distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price that would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under this Section
11, if the Preferred Shares are not publicly held or traded, the "Current Market
Price" per Preferred Share shall be conclusively deemed to be the Current Market
Price per Common Share multiplied by 100.
(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 then current Exercise Price; provided, however, that any adjustments that by
reason of this Section 11(e) are not required to be made shall be cumulated 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-thousandth of
a Common Share or other share or one-millionth of a Preferred Share, as the case
may be.
(f) If, as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right shall, upon exercise thereof, be
entitled to receive any securities of the Company other than Preferred Shares,
and if an event occurs in respect of such securities that, if it were to occur
in respect of Preferred Shares, would require an adjustment under this Section
11 in respect of Preferred Shares, then the number of such other securities so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Preferred Shares contained in this Section 11, and
the other provisions of this Agreement with respect to Preferred Shares shall
apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Exercise Price hereunder shall represent the right
to purchase, at the adjusted Exercise Price, the number of one-hundredths 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) below, upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
represent the right to purchase, at the adjusted Exercise Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
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(i) The Company may elect, on or after the date of any
adjustment of the Exercise Price, to adjust the number of Rights instead of
making any adjustment in the number of Preferred Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
one-thousandth of a Right) obtained by dividing the Exercise Price in effect
immediately prior to the adjustment of the Exercise Price by the Exercise Price
in effect immediately after such adjustment of the Exercise Price. The Company
shall make a public announcement of its election to adjust the number of Rights
pursuant to this Section 11(i), indicating the record date for the adjustment
and, if known at the time, the amount of the adjustment to be made. Such record
date may be the date on which the Exercise Price is adjusted or any day
thereafter, but, if separate Right Certificates have been issued, it shall be at
least 10 days after the date of such public announcement. If separate Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates representing, 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, 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 such adjustment, and upon surrender
thereof if required by the Company, new Right Certificates representing 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 may bear, at the option of the Company, the
adjusted Exercise Price) 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-hundredths of a Preferred Share issuable
upon the exercise of one Right, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price per one
one-hundredth of a Preferred Share and the number of Preferred Shares issuable
upon the exercise of one Right that 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-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action that may, in the advice or opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-hundredths of a Preferred Share 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, until the occurrence of such
event, the issuance to the holder of any Right exercised after such record date
of the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the
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number of one-hundredths of a Preferred Share 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 representing 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 further adjustments
in the number of one-hundredths of a Preferred Share that may be purchased upon
exercise of one Right, and such further adjustments in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Company 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 thereof, (iii) issuance wholly for cash of Preferred Shares
or securities that by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares
or (v) issuance of rights, options or warrants referred to in Section 11(b)
hereof, hereafter made by the Company to holders of its Preferred Shares shall
not be taxable to such stockholders.
(n) In the event that the Company shall, at any time after
the Close of Business on the Record Date and prior to the Close of Business on
the earliest of the date of the first Section 11(a)(ii) Event, the date of the
first Section 13(a) Event, the Redemption Date or the Rights Expiration Date,
(i) pay any dividend on the Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, (iii) combine the outstanding Common
Shares into a smaller number of Common Shares or (iv) issue Common Shares in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, and upon each such event, the Exercise Price to
be in effect after such event shall be determined by multiplying the Exercise
Price in effect immediately prior to such event by a fraction, the numerator of
which shall be equal to the number of Common Shares outstanding immediately
prior to such event and the denominator of which shall be equal to the number of
Common Shares outstanding immediately after such event. Successive adjustments
shall be made pursuant to this Section 11(n) each time such a dividend is paid
or such a subdivision, combination or reclassification is effected. If an event
occurs that would require an adjustment under both this Section 11(n) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF
SHARES ISSUABLE UPON EXERCISE OF RIGHTS. Whenever an adjustment is made as
provided in Section 11 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) file with the Rights Agent and with each
transfer agent for the securities issuable upon exercise of the Rights a copy of
such certificate and (c) mail a brief summary thereof to each holder of Rights
in accordance with Section 25 hereof. Notwithstanding the foregoing sentence,
the failure of the Company to make such certification or to give such notice
shall not affect the validity or the
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force and effect of such adjustment. Any adjustment to be made pursuant to
Sections 11 or 13 hereof shall be effective as of the date of the event giving
rise to such adjustment. 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 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.
(a) In the event (a "Section 13(a) Event") that, at any
time on or after the 15% Ownership Date and prior to the earlier of the
Redemption Date or the Rights Expiration Date, (1) the Company shall, directly
or indirectly, consolidate with or merge with and into any other Person and the
Company shall not be the continuing or surviving corporation in such
consolidation or merger, (2) any Person shall, directly or indirectly,
consolidate with or merge with and into the Company and the Company shall be the
continuing or surviving corporation in 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 Person or cash or any other property, or (3)
the Company and/or any one or more of its Subsidiaries shall, directly or
indirectly, sell or otherwise transfer, in one or more transactions (other than
transactions in the ordinary course of business), assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other than the Company
or one or more of its wholly-owned Subsidiaries (such Persons, together with the
Persons described in clauses (1) and (2) above shall be collectively referred to
in this Section as the "Surviving Person"), then, and in each such case, proper
provision shall be made so that:
(i) except as provided in Section 7(d) hereof, each holder
of a Right shall thereafter have the right to receive, upon the
exercise thereof in accordance with the terms of this Agreement and
payment of the then current Exercise Price, in lieu of the securities
or other property otherwise purchasable upon such exercise, such
number of validly authorized and issued, fully paid and nonassessable
Common Shares of the Surviving Person (and if such Surviving Person
has more than one class or series of Common Shares, such number of
validly authorized and issued, fully paid and nonassessable Common
Shares of each series or class) as shall be equal to a fraction, the
numerator of which is:
(A) if a Section 11(a)(ii) Event has not occurred
prior to such Section 13(a) Event, the product of the then
current Exercise Price multiplied by the number of
one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to the first
Section 13(a) Event (or, if the Distribution Date shall not
have occurred prior to the date of such Section 13(a)
Event, the number of one-hundredths of a Preferred Share
that would have been so purchasable if the Distribution
Date had occurred on the Business Day immediately preceding
the date of such Section 13(a) Event), or
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(B) if a Section 11(a)(ii) Event has occurred
prior to such Section 13(a) Event, the product of the
Exercise Price in effect immediately prior to such Section
11(a)(ii) Event multiplied by the number of one-hundredths
of a Preferred Share purchasable upon the exercise of one
Right immediately prior to such Section 11(a)(ii) Event
(or, if the Distribution Date shall not have occurred prior
to the date of such Section 11(a)(ii) Event, the number of
one-hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section
11(a)(ii) Event),
and the denominator of which is 50% of the Current Market Price per
Common Share of the Surviving Person on the date of consummation of
such Section 13(a) Event;
(ii) the Surviving Person 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 the Surviving Person; and
(iv) the Surviving Person 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 ensure that the provisions
hereof shall thereafter be applicable to its Common Shares thereafter
deliverable upon the exercise of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a)
Event is the sale or transfer in one or more transactions of assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole), but less than 100% thereof, then each
Person acquiring all or a portion thereof shall assume the obligations of the
Company as to a fraction of each of the Rights equal to the fraction of the
assets of the Company and its Subsidiaries (taken as a whole) acquired by such
Person, and the obligations of the Company as to the remaining fraction of each
of the Rights shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event
unless prior thereto the Company and the Surviving Person shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such Section 13(a) Event, assume
this Agreement in accordance with Section 13 hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
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(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing, use its best
efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Rights Expiration Date, and similarly
comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing
of) the Rights and the Common Shares of the Surviving Person
purchasable upon exercise of the Rights on a national securities
exchange, or use its best efforts to cause the Rights and such Common
Shares to meet the eligibility requirements for quotation on NASDAQ;
and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
(d) In the event that at any time after the occurrence of a
Section 11(a)(ii) Event some or all of the Rights shall not have been exercised
pursuant to Section 11 hereof prior to the date of a Section 13(a) Event, such
Rights shall thereafter be exercisable only in the manner described in Section
13(a) hereof. In the event that a Section 11(a)(ii) Event occurs on or after the
date of a Section 13(a) Event, Rights shall not be exercisable pursuant to
Section 11 hereof but shall instead be exercisable pursuant to, and only
pursuant to, this Section 13.
(e) The provisions of this Section 13 shall apply to each
successive merger, consolidation, sale or other transfer constituting a Section
13(a) Event.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates that represent fractional Rights. If
the Company shall determine not to issue such fractional Rights, the Company
shall pay to the registered holders of the Right Certificates with respect to
which such fractional Rights would otherwise be issuable, at the time such
fractional Rights would otherwise have been issued as provided herein, an amount
in cash equal to the same fraction of the Current Market Price of a whole Right
on the Business Day immediately prior to the date upon which such fractional
Rights would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of
Common Shares or Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of Rights, or
to distribute certificates that represent fractional Common Shares or Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
represented 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
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have all the rights, privileges and preferences to which they are entitled as
beneficial owners of Preferred Shares. If the Company shall determine not to
issue fractional Common Shares or Preferred Shares (or depositary receipts in
lieu of Preferred Shares), the Company shall pay to the registered holders of
Right Certificates with respect to which such fractional Common Shares or
Preferred Shares would otherwise be issuable, at the time such Rights are
exercised as provided herein, an amount in cash equal to the same fraction of
the Current Market Price of a whole Common Share or Preferred Share, as the case
may be. For purposes of this Section 14(b), the Current Market Price of a whole
Common Share or Preferred Share shall be the Closing Price per share for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional Common Shares or Preferred Shares upon exercise of such Right, except
as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18 hereof, are vested in the respective registered holders of the Right
Certificates and certificates for Common Shares representing Rights, and any
registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such 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 shall be entitled to specific
performance, and injunctive relief against actual or threatened violations, of
the obligations of any Person under this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
represented by certificates for Common Shares registered in the name of the
holders of such Common Shares (which certificates for Common Shares shall also
constitute Right Certificates), and each such Right shall be transferable only
in connection with the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates
shall only be transferable on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate is registered as the absolute owner
thereof and of the Rights represented thereby (notwithstanding any notations of
ownership or writing on the Right
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Certificate by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon 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 or 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, to give or withhold consent to any
corporate action, 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, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and shall
be protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for 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 its counsel as set forth in Section 20 hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special, 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.
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SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If, 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 if 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 such Right Certificate and in
this Agreement.
(b) If 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 if at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; and in all such cases such Right Certificates shall have
the full force provided in such Right Certificate and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement (and no implied duties or
obligations shall be read into this Agreement against the Rights Agent) upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance of the Rights, shall be bound:
(a) Before the Rights Agent acts or refrains from acting,
it 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 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 or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Vice Chairman of the Board, the President, any Vice President, the Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such
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certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement, or in
the Right Certificates (except its countersignature thereof), or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including any Rights becoming null
and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
7, 11, 13 and 23 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights represented by Right Certificates after actual notice that such change
or adjustment is required); 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 or Common Shares or other securities to be issued pursuant to
this Agreement or any Right Certificate, or as to whether any Preferred Shares
or Common Shares or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Chief Financial Officer, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such
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application (which date shall not be less than ten 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 instructions from the Company in
response to such application to the contrary.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided that reasonable care was exercised
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) 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 a 15% Stockholder, 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 completed, the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with the
Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30-days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and 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 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 Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates
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by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting as such, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
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 a
corporation organized and doing business under the laws of the United States or
of the States of New York or California (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the States of New York or California), in good standing, having a
principal office in New York or California, that is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose of this
Agreement and so that the successor Rights Agent may appropriately act as Rights
Agent hereunder. 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 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 Right Certificates to the
contrary, the Company may, at its option, issue new Right Certificates in such
form as may be approved by the Board of Directors in order 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 upon exercise of the Rights
in accordance with the provisions of this Agreement.
SECTION 23. REDEMPTION OF RIGHTS.
(a) Until the earliest of (i) the date of the first Section
11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or (iii) the
Rights Expiration Date, the Board of Directors of the Company may, at its
option, authorize and direct the redemption of all, but not less than all, of
the then outstanding Rights at a redemption price of $.001 per Right, as such
redemption price shall be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (the
"Redemption Price"), and the Company shall so redeem the Rights.
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(b) Immediately upon the action of the Board of Directors
of the Company authorizing and directing the redemption of the Rights pursuant
to subsection (a) of this Section 23, or at such time and date thereafter as it
may specify, and without any further action and without any notice, the right to
exercise Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Within ten (10) Business Days
after the date of such action, the Company shall give notice of such redemption
to the holders of Rights by mailing such notice to all holders of Rights at
their last addresses as they appear upon the registry books of the Rights Agent
or, if prior to the Distribution Date, on the registry books of the transfer
agent for the Common Shares. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives such notice,
but neither the failure to give any such notice nor any defect therein shall
affect the legality or validity of such redemption. Each such notice of
redemption 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,
directly or indirectly, redeem, acquire or purchase for value any Rights in any
manner other than that specifically set forth in Section 24 hereof or in this
Section 23, or in connection with the purchase of Common Shares prior to the
earlier of the date of the first Section 11(a)(ii) Event or the date of the
first Section 13(a) Event.
(c) The Company may, at its option, pay the Redemption
Price in cash, Common Shares, Preferred Shares, other equity securities of the
Company, debt securities of the Company, other property or any combination of
the foregoing, in each case having an aggregate Current Market Price on the
Redemption Date equal to the Redemption Price.
SECTION 24. EXCHANGE OF RIGHTS.
(a) At any time during the period of 180 days after a
Section 11(a)(ii) Event, the Board of Directors of the Company may, at its
option, authorize and direct the exchange of all, but not less than all, of the
then outstanding Rights for Common Shares, one one-hundredths of Preferred
Shares, debt securities of the Company, other property, or any combination of
the foregoing, in each case having an aggregate Current Market Price equal to
the result obtained by (i) multiplying the Current Market Price per Common Share
on the record date for such exchange by the number of Common Shares for which a
Right is exercisable on such record date and (ii) subtracting from such product
the Exercise Price on such Record Date (the "Exchange Ratio"), and the Company
shall so exchange the Rights.
(b) Immediately upon the action of the Board of Directors
of the Company authorizing and directing the exchange of the Rights pursuant to
subsection (a) of this Section 24, or at such time and date thereafter as it may
specify, and without any further action and without any notice, the right to
exercise Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive the securities described in Section 24(a) in
accordance with the Exchange Ratio. Within ten (10) Business Days after the date
of such action, the Company shall give notice of such exchange to the holders of
Rights by mailing such notice to all holders of Rights at their last addresses
as they appear upon the registry books of the Rights Agent or, if prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not
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the holder receives such notice, but neither the failure to give any such notice
nor any defect therein shall affect the legality or validity of such exchange.
Each such notice of exchange shall state the method by which the Rights will be
exchanged.
(c) Notwithstanding the foregoing, in the event that the
aggregate number of Common Shares that are authorized by the Company's
Certificate of Incorporation, as amended from time to time, but not outstanding
or reserved for issuance for purposes other than upon exercise or exchange of
the Rights is less than the aggregate number of Common Shares issuable upon the
exchange of the Rights in accordance with this Section 24 (the excess of such
number of authorized Common Shares over and above such number of issuable Common
Shares being hereinafter referred to as the "Unavailable Exchange Shares"), then
the Company shall substitute for the pro rata portion of the Unavailable
Exchange Shares that would otherwise be issuable upon the exchange of the Rights
in accordance with this Section 24 (i) cash, (ii) other equity securities of the
Company (including, without limitation, Common Share Equivalents), (iii) debt
securities of the Company, (iv) other property or (v) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Exchange Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 24, such action shall apply
uniformly to all outstanding Rights.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall propose (i) to
declare or pay any dividend on or make any distribution with respect to its
Common Shares or Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Common Shares or Preferred Shares
options, rights or warrants to subscribe for or to purchase any additional
shares thereof or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Common Shares or
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding shares), (iv) to effect any consolidation or merger with or into,
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 more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then and in
each such case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action that shall
specify the record date for the purpose of such dividend or distribution, or the
date upon 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 record of the Common Shares or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 20 days
prior to the record date for determining holders of the Common Shares or
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 20 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 or
Preferred Shares, whichever date shall be the earlier. The failure to give the
notice required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
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(b) Upon the occurrence of each Section 11(a)(ii) Event and
each Section 13(a) Event, the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, specifying the event and the
consequences of the event to holders of Rights under Sections 11 and 13 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:
▇▇▇▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made to or on the Rights Agent (i) by the
Company shall be sufficiently given or made if sent, postage prepaid, by
registered or certified mail, addressed to the principal office of the Rights
Agent as set forth below (until another address is filed in writing with the
Company) or (ii) by the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to the
principal office of the Rights Agent as set forth below (until another address
is filed in writing with the Company), and shall be deemed given upon actual
receipt. The Company hereby agrees that it shall encourage the holders of the
Right Certificates, in any and all writings to such holders regarding the Rights
or this Agreement, to give or make any notice or demand authorized by this
Agreement by registered or certified mail, addressed to the principal office of
the Rights Agent as follows (until another address is filed in writing with the
Company):
▇▇▇▇▇▇ Trust Company of California
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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.
(a) The Board of Directors of the Company may, from time to
time, without the approval of any holders of Rights, supplement or amend any
provision of this Agreement in any manner, whether or not such supplement or
amendment is adverse to any holder of Rights, and direct the Rights Agent so to
supplement or amend such provision, and the Rights Agent shall so supplement or
amend such provision; provided, however, that from and after the earliest
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of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first
Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration Date, this
Agreement shall not be supplemented or amended in any manner that would
materially and adversely affect any holder of outstanding Rights other than a
15% Stockholder or a Surviving Person.
(b) From and after the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior
to the Rights Expiration Date, the Company shall not effect any amendment to the
Certificate of Designations for the Preferred Shares that would materially and
adversely affect the rights, privileges or preferences of the Preferred Shares
without the prior approval of the holders of two-thirds or more of the then
outstanding Rights. Notwithstanding anything in this Agreement to the contrary,
no supplement or amendment that changes the rights and duties of the Rights
Agent under this Agreement in any manner adverse to the Rights Agent will be
effective against the Rights Agent without the execution of such supplement or
amendment by the Rights Agent.
SECTION 28. CERTAIN COVENANTS. Subject to Section 27 hereof and the
other provisions of this Agreement, from and after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Rights Expiration Date,
the Company shall not (a) issue or sell, or permit any Subsidiary to issue or
sell, to a 15% Stockholder or a Surviving Person, or any Affiliate or Associate
of a 15% Stockholder or a Surviving Person, or any Person holding Voting Shares
of the Company that are Beneficially Owned by a 15% Stockholder or a Surviving
Person, (i) any rights, options, warrants or convertible securities on terms
similar to, or that materially adversely affect the value of, the Rights or (ii)
Preferred Shares, Common Shares or shares of any other class of capital stock,
if such sale is intended to or would materially adversely affect the value of
the Rights, or (b) take any other action that is intended to or would materially
adversely affect the value of the Rights.
SECTION 29. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (other than those
representing Rights that have become null and void) and the certificates for
Common Shares representing Rights (other than those Rights that have become null
and void) any legal or equitable right, remedy or claim under this Agreement,
and this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and such registered holders of Right Certificates and
certificates for Common Shares representing Rights.
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this
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Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts made and
performed entirely within such state, except as to the rights and obligations of
the Rights Agent which shall be governed by and construed in accordance with the
laws of the State of Illinois.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each such counterpart shall for all purposes be
deemed to be an original and all such counterparts shall together constitute but
one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
▇▇▇▇▇▇▇▇ INCORPORATED
Attest:
By:_________________________________ By:_____________________________________
Name: Name:
Title: Title:
▇▇▇▇▇▇ TRUST COMPANY OF
CALIFORNIA, as Rights Agent
Attest:
By:_________________________________ By:_____________________________________
Name: Name:
Title: Title:
Exhibit A
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EXHIBIT A
Form of Right Certificate
Certificate No.____ __________ Rights
NOT EXERCISABLE AFTER THE LATER OF FEBRUARY 17, 2009 OR THE TENTH
ANNIVERSARY OF THE DISTRIBUTION DATE (AS THAT TERM IS DEFINED IN THE
RIGHTS AGREEMENT) OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
A 15% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF A 15% STOCKHOLDER
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT AND AS THOSE
CIRCUMSTANCES ARE SPECIFIED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON
WHO WAS A 15% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF A 15%
STOCKHOLDER. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT.]*
Right Certificate
▇▇▇▇▇▇▇▇ INCORPORATED
This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of February 17, 1999 (the "Rights
Agreement") between ▇▇▇▇▇▇▇▇ Incorporated, a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ Trust Company of California, a California banking
corporation (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., California time, on the later of February 17, 2009 or the
tenth anniversary of the Distribution
---------------
* That portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
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Date at the office or agency of the Rights Agent at ▇▇▇▇▇▇ Trust Company of
California, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
the office of its successors as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series C Junior Participating Cumulative Preferred
Stock, $.01 par value (the "Preferred Shares"), of the Company, at an exercise
price of $60.00 per Right (the "Exercise Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of Preferred Shares that may be purchased upon exercise thereof) set
forth above, and the Exercise Price per share set forth above, are the number
and Exercise Price as of February 17, 1999, based on the Preferred Shares as
constituted at such date.
As provided in the Rights Agreement, the Exercise Price and
the number of Preferred Shares that 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. 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 Rights Certificates. Copies of the Rights Agreement are
on file at the principal executive offices of ▇▇▇▇▇▇▇▇ Incorporated and the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the Rights Agent at
▇▇▇▇▇▇ Trust Company of California, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, the Rights evidenced by this
Certificate may, but are not required to, be redeemed by the Company at a
redemption price of $.001 per Right.
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-hundredth 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 that may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to
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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 and its corporate seal. Dated as of _________________.
ATTEST: DUCOMMUN INCORPORATED
---------------------------- ----------------------------
Secretary President
Countersigned:
▇▇▇▇▇▇ TRUST COMPANY OF CALIFORNIA, as Rights Agent
By:
-----------------------------
Title:
--------------------------
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________________ hereby
sells, assigns and transfers unto _____________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, ____
----------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
----------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate in every
particular, without alteration or
enlargement or any change whatsoever)
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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 DUCOMMUN INCORPORATED
The undersigned hereby irrevocably elects to exercise
___________________ Rights represented by this Right Certificate to purchase the
Preferred Shares or other securities issuable upon the exercise of such Rights
and requests that certificates for such Preferred Shares or other securities be
issued in the following name:
(please print name, address and social security,
tax identification or other identifying number:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
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 print name, address and social security,
tax identification or other identifying number:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Dated:
----------------------
----------------------------------------
Signature
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(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate in every
particular, without alteration or
enlargement or any change whatsoever)
Form of Reverse Side of Right Certificate -- continued
Signature Guarantee:
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 a 15% Stockholder or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
--------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate in every
particular, without alteration or
enlargement or any change whatsoever)
NOTICE
The signatures in the foregoing Forms of Assignment and
Election must correspond 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 Forms
of Assignment and Election is not completed, the Company will deem the
Beneficial Owner of the Rights evidenced by this Right Certificate to be a 15%
Stockholder or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that effect
on any Right Certificates issued in exchange for this Right Certificate.
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