SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT
TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE
ACT OF 1934
InteliData Technologies Corporation
(Exact name of registrant as specified in its charter)
Delaware 54-1820617
(State of incorporation or organization) (IRS employer
identification no.)
13100 Worldgate Drive, Suite 600
Herndon, Virginia 20170
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on
which
to be so registered each class is to be
registered
None N/A
Securities to be registered pursuant to Section 12(g) of the
Act:
Preferred Stock Purchase Rights
(Title of class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On January 21, 1998, the Board of Directors of
InteliData Technologies Corporation, a corporation organized
under the laws of the State of Delaware (the "Company"),
approved a Rights Agreement, dated as of and to be effective
on January 21, 1998 (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as
Rights Agent, having the principal terms summarized below.
In accordance with the Rights Agreement, the Board also
declared a dividend distribution of one Right for each
outstanding share of common stock (the "Common Stock"), of
the Company to stockholders of record at the close of
business on February 6, 1998 (the "Record Date").
Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of the
Company's Series A Cumulative Preferred Stock ("Preferred
Stock"). Each one one-thousandth of a share (a "Unit") of
Preferred Stock is structured to be the equivalent of one
share of Common Stock of the Company ("Common Stock").
Stockholders will receive one Right per share of Common
Stock held of record at the close of business on the Record
Date. The exercise price of the Right will be $13.00
subject to adjustment (the "Purchase Price").
Rights will also attach to shares of Common Stock
issued after the Record Date but prior to the Distribution
Date unless the Board of Directors determines otherwise at
the time of issuance. The description and terms of the
Rights are set forth in the Rights Agreement.
The Rights will be appurtenant to the shares of Common
Stock and will be evidenced by Common Stock certificates,
and no separate certificates evidencing the Rights (the
"Rights Certificates") will be distributed initially. The
Rights will separate from the Common Stock and a
distribution of the Rights Certificates will occur (the
"Distribution Date") upon the earlier of (i) 10 days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), or (ii) 10 business
days following the commencement of a tender offer or
exchange offer that would result in a person or group
beneficially becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) any Common
Stock certificates issued will contain a notation
incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates.
WorldCorp, Inc. ("WorldCorp"), the beneficial owner of
approximately 29% of the Company's Common Stock, as of the
date hereof, is specifically excluded from the definition of
Acquiring Person, subject to certain conditions. WorldCorp
shall be deemed an Acquiring Person, if at any time during
which WorldCorp beneficially owns 20% or more of the Common
Stock, (i) there is not a majority of Continuing Directors
(as defined below) currently serving on the Board of
Directors of WorldCorp, (ii) the slate of directors
nominated for election to the Board of WorldCorp, whose
nomination was recommended or approved by the majority of
the Continuing Directors of WorldCorp serving at the time of
such nomination or election, at any annual or special
meeting of the stockholders called for the purpose of
electing directors, shall not be elected or (iii) a slate
of directors not nominated by the majority of Continuing
Directors of WorldCorp serving at the time of such
nomination or election shall be elected at such meeting.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on January 21,
2008, unless earlier redeemed or exchanged by the Company as
described below. As soon as practicable after the
Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of
business on the Distribution Date, and thereafter such
separate Rights Certificates alone will represent the
Rights.
While each Right will initially provide for the
acquisition of one Unit of Preferred Stock at the Purchase
Price, the Agreement provides that if any person becomes an
Acquiring Person, proper provision shall be made so that
each holder of a Right (except as set forth below) will
thereafter have the right to receive, upon exercise and
payment of the Purchase Price, Preferred Stock or, at the
option of the Company, Common Stock (or, in certain
circumstances, cash, property or other securities of the
Company) having a value equal to twice the amount of the
Purchase Price.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger,
statutory share exchange, or other business combination in
which the Company is not the surviving corporation, or (ii)
50% or more of the Company's assets or earning power is sold
or transferred, each holder of a Right (except as set forth
below) shall thereafter have the right to receive, upon
exercise and payment of the Purchase Price, common stock of
the acquiring company having a value equal to twice the
Purchase Price. The events set forth in this paragraph and
in the immediately preceding paragraph are referred to as
the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles
Rights holders to purchase securities or assets of the
Company, Rights that are or were owned by the Acquiring
Person, or any affiliate or associate of such Acquiring
Person, on or after such Acquiring Person's Stock
Acquisition Date shall be null and void and shall not
thereafter be exercised by any person (including subsequent
transferees). Upon the occurrence of a Triggering Event
that entitles Rights holders to purchase common stock of a
third party, or upon the authorization of an Exchange,
Rights that are or were owned by any Acquiring Person or any
affiliate or associate of any Acquiring Person on or after
such Acquiring Person's Stock Acquisition Date shall be null
and void and shall not thereafter be exercised by any person
(including subsequent transferees).
The Purchase Price payable, and the number of shares of
Preferred Stock, Common Stock or other securities or
property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution.
At any time (including a time after any person becomes
an Acquiring Person), the Company may exchange all or part
of the Rights (except as set forth below) for shares of
Common Stock (an "Exchange") at an exchange ratio of one
share per Right, as appropriately adjusted to reflect any
stock split or similar transaction.
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Under certain circumstances set forth
in the Rights Agreement, the decision to make an Exchange or
to redeem the Rights shall require the concurrence of a
majority of the Continuing Directors (as defined below).
Additionally, the Company may thereafter but prior to the
occurrence of a Triggering Event redeem the Rights in whole,
but not in part, at the Redemption Price provided that such
redemption is incidental to a merger or other business
combination transaction involving the Company that is
approved by a majority of the Continuing Directors, does not
involve an Acquiring Person, and in which all holders of
Common Stock are treated alike. After the redemption period
has expired, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial
ownership to less than 10% of the outstanding shares of
Common Stock in a transaction or series of transactions not
involving the Company. Immediately upon the action of the
Board ordering redemption of the Rights, with, where
required, the concurrence of the Continuing Directors, the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the
Board, or the Board of Directors of WorldCorp (the
"WorldCorp Board"), as the case may be, who was a member of
the Board or the WorldCorp Board, immediately before the
adoption of the Rights Agreement, and any person who is
subsequently elected to the Board or the WorldCorp Board, if
such person is recommended or approved by a majority of the
Continuing Directors, but does not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person,
or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Preferred Stock (or other consideration) of
the Company or for common stock of the acquiring company as
set forth above.
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the
Rights Agreement may be amended by the Board prior to the
Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, only with the concurrence
of the Continuing Directors) in order to cure any ambiguity,
to make certain other changes that do not adversely affect
the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, no
amendment to adjust the time period governing redemption may
be made at such time as the Rights are not redeemable.
The Rights Agreement (which includes as Exhibit A the
form of Rights Certificate) is attached to this Registration
Statement as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights
Agreement and its exhibits.
Item 2. Exhibits.
The following exhibits are filed as a part hereof:
1. Rights Agreement, dated as of January 21, 1997
between the Company and American Stock Trust &
Transfer Company, as Rights Agent.
2. Form of Rights Certificate, included as Exhibit A to
the Rights Agreement.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
INTELIDATA TECHNOLOGIES CORPORATION
(Registrant)
By: /s/John C. Backus, Jr.
John C. Backus, Jr.
President and
Chief Executive Officer
Dated: January 22, 1998
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Pages
1 Rights Agreement, dated as of
January 21, 1998 between the Company and
American Stock Transfer & Trust Company, as
Rights Agent
2 Form of Rights Certificate
(included as Exhibit A to the Rights
Agreement)
Exhibit 1
INTELIDATA TECHNOLOGIES CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
_______________
Rights Agreement
Dated as of January 21, 1998
<PAGE>
Table of Contents
Page
Section 1. Certain Definitions.
1
Section 2. Appointment of Rights Agent.
5
Section 3. Issue of Rights and Rights Certificates.
5
Section 4. Form of Rights Certificates.
7
Section 5. Countersignature and Registration.
8
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights; Restriction on
Transfer of Rights.
9
Section 8. Cancellation and Destruction of Rights
Certificates.
11
Section 9. Reservation and Availability of Preferred Stock.
11
Section 10. Preferred Stock Record Date.
12
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.
13
Section 12.Certificates of Adjusted Purchase Price or
Number of Shares.
20
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
20
Section 14. Fractional Rights and Fractional Shares.
22
Section 15. Rights of Action.
23
Section 16. Agreement of Rights Holders.
24
Section 17. Rights Certificate Holder Not Deemed a
Stockholder.24
Section 18. Concerning the Rights Agent.
25
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
25
Section 20. Duties of Rights Agent.
26
Section 21. Change of Rights Agent.
28
Section 22. Issuance of New Rights Certificates.
28
Section 23. Redemption and Termination.
29
Section 24. Exchange.
30
Section 25. Notice of Certain Events.
31
Section 26. Notices.
32
Section 27. Supplements and Amendments.
32
Section 28. Successors.
33
Section 29. Determinations and Actions by the Board
of Directors, etc.
33
Section 30. Benefits of this Agreement.
34
Section 31. Severability.
34
Section 32. Governing Law.
34
Section 33. Counterparts.
34
Section 34. Descriptive Headings.
34
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
This Agreement, dated as of January 21, 1998 (the
"Agreement"), between INTELIDATA TECHNOLOGIES CORPORATION, a
Delaware corporation (the "Company"), and American Stock
Transfer
& Trust Company, a New York corporation (the "Rights
Agent"),
provides as follows:
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend distribution of one Right
(as
hereinafter defined) for each outstanding share of Common
Stock
of the Company to stockholders of record at the Close of
Business
(as hereafter defined) on the Record Date (as hereinafter
defined) and has authorized the issuance of one Right (as
such
number may hereinafter be adjusted as provided herein) for
each
share of Common Stock that shall be issued between the
Record
Date and the earliest of the Distribution Date, the
Redemption
Date or the Expiration Date (as such terms are hereinafter
defined) unless the Board of Directors provides to the
contrary
before or at the time of issuance of any such Common Stock,
each
Right initially representing the right to purchase one Unit
of
Preferred Stock, (as hereinafter defined), and being in the
form
of the Rights Certificate attached hereto as Exhibit A, upon
the
terms and subject to the conditions hereof (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the
mutual agreements herein set forth, the parties hereby agree
as
follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms
have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which,
alone or together with all Affiliates and Associates of such
Person, shall at any time be the Beneficial Owner of either
or
both of (i) 20% or more of the shares of Common Stock then
outstanding or (ii) 20% or more of the Rights then
outstanding,
but shall not include (a) the Company, WorldCorp, Inc.
("WorldCorp"), any Subsidiary of the Company or WorldCorp,
any
employee benefit plan of the Company or of any Subsidiary of
the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any
such plan or, (b) any such Person who has become and is such
a
Beneficial Owner solely because (1) of a reduction in the
aggregate number of shares of Common Stock outstanding due
to a
repurchase of shares of Common Stock by the Company since
the
last date on which such Person acquired Beneficial Ownership
of
any shares of Common Stock or (2) it acquired such
Beneficial
Ownership of in the good faith belief that such acquisition
would
not (A) cause such Beneficial Ownership to equal or exceed
20% of
the shares of Common Stock then outstanding and such Person
relied in good faith in computing the percentage of its
Beneficial Ownership on publicly filed reports or documents
of
the Company that are inaccurate or out-of-date or (B)
otherwise
cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (b)(2) of the
preceding sentence, if any Person that is not an Acquiring
Person
due to such clause (b)(2) does not reduce its percentage of
Beneficial Ownership of shares of Common Stock to less than
20%
by the Close of Business on the fifth Business Day after
notice
from the Company (the date of notice being the first day)
that
such Person's Beneficial Ownership of shares of Common Stock
so
equals or exceeds 20%, such Person shall, at the end of such
five
Business Day period, become an Acquiring Person (and such
clause
(b)(2) shall no longer apply to such Person). For purposes
of
this definition, the determination whether any Person acted
in
"good faith" shall be conclusively determined by the Board
of
Directors of the Company, acting by a vote of those
directors of
the Company whose approval would be required to redeem the
Rights
under Section 23.
Notwithstanding the foregoing, WorldCorp shall be
deemed an
Acquiring Person pursuant to the terms hereof, if at any
time
during which WorldCorp Beneficially Owns 20% or more of the
Common Stock, (i) there is not a majority of Continuing
Directors
currently serving on the Board of Directors of WorldCorp,
(ii)
the slate of directors nominated for election to the Board
of
WorldCorp, whose nomination was recommended or approved by
the
majority of the Continuing Directors of WorldCorp serving at
the
time of such nomination or election, at any annual or
special
meeting of the stockholders called for the purpose of
electing
directors, shall not be elected or (iii) a slate of
directors
not nominated by the majority of Continuing Directors of
WorldCorp serving at the time of such nomination or election
shall be elected at such meeting.
(b) "Affiliate" and "Associate" shall have the
respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.
(c) 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 is deemed to "beneficially own"
within
the meaning of Rule 13d-3 of the General Rules and
Regulations
under the Exchange Act;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right
to acquire (whether such right is exercisable immediately or
only
after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
upon
the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed to be the "Beneficial Owner" of,
or to
"beneficially own," (A) securities tendered pursuant to a
tender
or exchange offer made by such Person or any of such
Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (B) securities issuable
upon
exercise of the Rights.
(iii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right
to vote, including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however,
that
a Person shall not be deemed the "Beneficial Owner" of, or
to
"beneficially own," any security under this subparagraph
(iii) as
a result of an agreement, arrangement or understanding to
vote
such security if such agreement, arrangement or
understanding:
(A) arises solely from a revocable proxy given in response
to a
public proxy solicitation made pursuant to, and in
accordance
with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) the beneficial
ownership of such security is not also then reportable by
such
Person on Schedule 13D under the Exchange Act (or any
comparable
or successor report); or
(iv) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose
of
acquiring, holding, voting (except pursuant to a revocable
proxy
as described in the proviso to subparagraph (iii) of this
paragraph (c)) or disposing of any voting securities of the
Company; provided, however, that notwithstanding any
provision of
this Section 1(c), any Person engaged in business as an
underwriter of securities who acquires any securities of the
Company through such Person's participation in good faith in
a
firm commitment underwriting registered under the Securities
Act
of 1933, as amended (the "Act"), shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," such
securities
until the expiration of 40 days after the date of
acquisition;
and provided, further, that in no case shall an officer or
director of the Company be deemed (x) the beneficial owner
of any
securities beneficially owned by another officer or director
of
the Company solely by reason of actions undertaken by such
persons in their capacity as officers or directors of the
Company; or (y) the beneficial owner of securities held of
record
by the trustee of any employee benefit plan of the Company
or any
Subsidiary of the Company for the benefit of any employee of
the
Company or any Subsidiary of the Company, other than the
officer
or director, by reason of any influence that such officer or
director may have over the voting of the securities held in
the
plan.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which national banking
institutions
in the State of New York are authorized or obligated by law
or
executive order to close.
(e) "Close of Business" on any given date shall mean
5:00
P.M., New York City time, on such date; provided, however,
that
if such date is not a Business Day it shall mean 5:00 P.M.,
New
York City time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, $.001
per
share, of the Company, except that "Common Stock" when used
with
reference to any Person other than the Company, if such
Person is
a corporation, shall mean the capital stock of such Person
with
the greatest voting power, or the equity securities or other
equity interest in such Person having power to control or
direct
the management of such Person, or any shares of capital
stock or
other equity interests into which the foregoing shall be
reclassified or changed.
(g) "Continuing Director" shall mean any member of the
Board of Directors of the Company or the Board of Directors
of
WorldCorp (the "WorldCorp Board"), as the case may be, while
a
member of the Board or the WorldCorp Board, who is not an
Acquiring Person, or an Affiliate or Associate of an
Acquiring
Person, or a representative of an Acquiring Person or of any
such
Affiliate or Associate, and (i) who is a member of the Board
or
the WorldCorp Board on the date of this Agreement or (ii)
whose
subsequent nomination for election or election to the Board
or
the WorldCorp Board was recommended or approved by a
majority of
the Continuing Directors serving at the time of such
nomination
or election.
(h) "Distribution Date" shall mean the earlier of (i)
the
Close of Business on the tenth day after the Stock
Acquisition
Date (as hereinafter defined) or (ii) the close of business
on
the tenth business day after the date that a tender or
exchange
offer by any Person (other than the Company, any Subsidiary
of
the Company, any employee benefit plan of the Company or of
any
Subsidiary of the Company, or any Person or entity
organized,
appointed or established by the Company for or pursuant to
the
terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act if, upon consummation
thereof,
such Person would be an Acquiring Person (irrespective of
whether
any shares were actually purchased pursuant to any such
offer).
(i) "Equivalent Shares" shall mean shares of Preferred
Stock (as hereinafter defined) and any other class or series
of
capital stock of the Company that is entitled to participate
in
dividends and other distributions, including distributions
upon
the liquidation, dissolution or winding up of the Company,
on a
proportional basis with the Common Stock. In calculating
the
number of any class or series of Equivalent Shares for
purposes
of Section 11 hereof, the number of shares, or fractions of
a
share, of such class or series of capital stock that is
entitled
to the same dividend or distribution as a whole share of
Common
Stock shall be deemed to be one share.
(j) "Exchange Act" shall mean the Securities Exchange
Act
of 1934, as amended and in effect on the date of this
Agreement,
unless a different date is otherwise specifically provided
herein.
(k) "Exchange Date" shall mean the date on which the
Board
of Directors authorizes the exchange of Rights for shares of
Common Stock pursuant to Section 24 hereof.
(l) "Expiration Date" shall mean the earliest of (i)
the
close of business on the Final Expiration Date, or (ii) the
time
at which the Rights are redeemed as provided in Section 23
hereof, or (iii) the Exchange Date.
(m) "Final Expiration Date" shall mean 10 years from
the
date hereof.
(n) "Person" shall mean any individual, firm,
corporation,
partnership or other entity and any particular Person shall
include any "group" acting as described in Section 13(d)(3)
of
the Exchange Act.
(o) "Preferred Stock" shall mean shares of Series A
Cumulative Preferred Stock, without par value, of the
Company.
(p) "Purchase Price" shall have the meaning set forth
in
Section 4(a) hereof, as adjusted in accordance with this
Agreement and as in effect from time to time.
(q) "Record Date" shall mean the Close of Business on
February 6, 1998.
(r) "Rights" shall mean the rights to purchase
Preferred
Stock (or other securities) as provided in this Agreement
and
"Rights Certificate" shall have the meaning set forth in
Section
3(a) hereof.
(s) "Section 11(a)(ii) Event" shall mean any
occurrence of
the event described in the first sentence of Section
11(a)(ii)
hereof.
(t) "Section 13 Event" shall mean any event described
in
clause (w), (x), (y) or (z) of Section 13(a) hereof.
(u) "Stock Acquisition Date" shall mean the first date
of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant
to
Section 13(d) of the Exchange Act) by the Company or an
Acquiring
Person that an Acquiring Person has become such.
(v) "Subsidiary" shall mean, with reference to any
Person,
any corporation or other entity of which an amount of voting
securities sufficient to elect a majority of the directors
or
Persons having similar authority of such corporation or
other
entity is beneficially owned, directly or indirectly, by
such
Person, or otherwise controlled by such Person.
(w) "Triggering Event" shall mean any Section
11(a)(ii)
Event or any Section 13 Event.
(x) "Unit" shall mean one one-thousandth of a share of
Preferred Stock.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as
agent
for the Company and the holders of the Rights (who, in
accordance
with Section 3 hereof, shall prior to the Distribution Date
also
be holders of Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such
Co-
Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights and Rights Certificates.
(a) Until the Distribution Date, (x) the Rights shall
be
evidenced (subject to the provisions of paragraphs (b) and
(c) of
this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock
(which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates,
and
(y) the Rights shall be transferable only in connection with
the
transfer of the underlying shares of Common Stock (including
a
transfer to the Company). Subject to the provisions of
Section
7(e) hereof, as soon as practicable after the Company has
notified the Rights Agent of the occurrence of a
Distribution
Date, the Rights Agent shall send by first-class, insured,
postage prepaid mail, to each such record holder of shares
of the
Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of
the
Company, one or more rights certificates, in substantially
the
form of Exhibit A hereto (the "Rights Certificates"),
evidencing
one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment
in the number of Rights per share of Common Stock has been
made
pursuant to Section 11(o) hereof, at the time of
distribution of
the Rights Certificates, the Company shall make the
necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only
whole
numbers of Rights are distributed and cash is paid in lieu
of any
fractional Rights. As of and after the Distribution Date,
the
Rights shall be evidenced solely by such Rights
Certificates.
(b) A Summary of Rights, in substantially the form
attached
hereto as Exhibit B (the "Summary of Rights"), shall be sent
by
the Company by first-class, postage prepaid mail, to each
record
holder of the Common Stock on the Record Date, at the
address of
each such holder shown on the records of the Company. Until
the
Distribution Date, the Rights shall be evidenced by such
certificates evidencing the Common Stock, and the registered
holders of the Common Stock shall also be the registered
holders
of the associated Rights. Until the earlier of the
Distribution
Date or the Expiration Date, the transfer of any
certificates
evidencing shares of Common Stock in respect of which Rights
have
been issued shall also constitute, subject to the provisions
of
Section 7(e) hereof, the transfer of the Rights associated
with
such shares of Common Stock.
(c) Unless the Board of Directors by resolution
adopted at
or before the time of the issuance (including pursuant to
the
exercise of rights under the Company's benefit plans) of any
shares of Common Stock specifies to the contrary, Rights
shall be
issued in respect of all shares of Common Stock that are
issued
after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing shares of Common Stock outstanding prior to the
Record Date that are issued upon transfer or exchange of
such
Common Stock, shall also be deemed to be certificates for
Rights,
and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement
between InteliData Technologies Corporation (the "Company")
and
American Stock Transfer & Trust Company, a New York
corporation
(the "Rights Agent") dated as of January 21, 1998 (the
"Rights
Agreement"), the terms of which are hereby incorporated
herein by
reference and a copy of which is on file at the principal
offices
of the Company. Under certain circumstances, as set forth
in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate.
The Company will mail to the holder of this certificate a
copy of
the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights
Agreement, Rights that are owned or that were previously
owned by
a Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate of an Acquiring Person may become
null and
void.
With respect to such certificates containing the
foregoing
legend, until the earlier of (i) the Distribution Date or
(ii)
the Expiration Date, the Rights associated with the Common
Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock
shall
also be the registered holders of the associated Rights, and
the
transfer of any of such certificates shall also constitute,
subject to the provisions of Section 7(e) hereof, the
transfer of
the Rights associated with the Common Stock represented by
such
certificates.
In the event that the Company purchases or acquires any
shares of Common Stock after the Record Date but prior to
the
Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed canceled and retired so that
the
Company shall not be entitled to exercise any Rights
associated
with the shares of Common Stock that are no longer
outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to
purchase and of assignment to be printed on the reverse
thereof)
shall each be substantially in the form set forth in Exhibit
A
hereto and may have such marks of identification or
designation
and such legends, summaries or endorsements printed thereon
as
the Company may deem appropriate and as are not inconsistent
with
the provisions of this Agreement, or as may be required to
comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be
listed, or
to conform to usage. Subject to the provisions of Section
11 and
Section 22 hereof, the Rights Certificates, whenever
distributed,
shall be dated as of the Distribution Date, and on their
face
shall entitle the holders thereof to purchase such number of
Units of Preferred Stock as shall be set forth therein at
the
price set forth therein (such exercise price per unit, being
hereinafter referred to as the "Purchase Price"), but the
amount
and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a)
or Section 22 hereof that represents Rights beneficially
owned
by: (i) an Acquiring Person or any Associate or Affiliate of
an
Acquiring Person, (ii) a transferee of an Acquiring Person
(or of
any such Associate or Affiliate) who becomes a transferee
after
the Acquiring Person becomes such, or (iii) a transferee of
an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
Acquiring
Person becoming such and receives such Rights pursuant to
either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring
Person or to any Person with whom such Acquiring Person has
any
continuing agreement, arrangement or understanding regarding
the
transferred Rights or (B) a transfer that the Board of
Directors
of the Company has determined is part of a plan, arrangement
or
understanding which has a primary purpose or effect
avoidance of
Section 7(e) hereof, and any Rights Certificate issued
pursuant
to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a person who was or became an
Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Rights Certificate and
the Rights represented hereby may become void in the
circumstances specified in Section 7(e) of the Rights
Agreement.
The Company shall notify the Rights Agent, and, if such
notification is given orally, the Company shall confirm
promptly
the same in writing, at such time as the Company has notice
that
any Person constitutes an Acquiring Person or an Affiliate
or
Associate of an Acquiring Person, and until such notice is
received by the Rights Agent the Rights Agent may
conclusively
presume for all purposes that the foregoing legend need be
imprinted only on Right Certificates beneficially owned by
Persons that the Company has previously identified to the
Rights
Agent as constituting an Acquiring Person or an Affiliate or
Associate of an Acquiring Person and transferees of any such
Persons.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of
the Company by its Chairman of the Board, its President or
any
Vice President, either manually or by facsimile signature,
and
shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an
Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned
manually or by facsimile by the Rights Agent and shall not
be
valid for any purpose unless so countersigned. The Rights
Certificates shall be countersigned by an authorized
signatory of
the Rights Agent but it shall not be necessary for the same
signatory to countersign all of the Rights Certificates
issued
hereunder. In case any officer of the Company who shall
have
signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights
Agent and issued and delivered by the Company with the same
force
and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the
Company;
and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the
execution of
such Rights Certificate, shall be a proper officer of the
Company
to sign such Rights Certificate, although at the date of the
execution of this Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent
will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for
registration
and transfer of the Rights Certificates issued hereunder.
Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and
the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e)
and Section 14 hereof, at any time after the close of
business on
the Distribution Date, and at or prior to the close of
business
on the Expiration Date, any Rights Certificate or
Certificates
may be transferred, split up, combined or exchanged for
another
Rights Certificate or Certificates, (other than Rights
Certificates that have become void pursuant to Section 7(e)
hereof or that have been exchanged pursuant to Section 24
hereof)
entitling the registered holder to purchase a like number of
Units of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the
case
may be) as the Rights Certificate or Certificates
surrendered
then entitle such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights
Certificate or
Certificates shall make such request in writing delivered to
the
Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or
exchanged
at the principal office or offices of the Rights Agent
designated
for such purpose. Neither the Rights Agent nor the Company
shall
be obligated to take any action whatsoever with respect to
the
transfer of any such surrendered Rights Certificate until
the
registered holder shall have completed and signed the
certificate
contained in the form of assignment on the reverse side of
such
Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights
Agent
shall countersign and deliver to the Person entitled thereto
a
Rights Certificate or Rights Certificates, as the case may
be, as
so requested. The Company may require payment from the
holder of
the Rights of a sum sufficient to cover any tax or
governmental
charge that may be imposed in connection with any transfer,
split
up, combination or exchange of Rights Certificates.
(b) Subject to Section 7(e) hereof, upon receipt by
the
Company and the Rights Agent of evidence reasonably
satisfactory
to them of the loss, theft, destruction or mutilation of a
Rights
Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender
to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in
lieu of
the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights; Restriction on Transfer of
Rights.
(a) Subject to Section 7(e) hereof, the registered
holder
of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including,
without
limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(ii), Section 11(a)(iii), Section
13,
Section 23(a), and Section 24 hereof) in whole or in part at
any
time after the Distribution Date upon surrender of the
Rights
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to
the
Rights Agent at the principal office or offices of the
Rights
Agent designated for such purpose, together, except as
otherwise
provided in Section 11(a)(ii) hereof, with payment of the
aggregate Purchase Price with respect to the total number of
Units of Preferred Stock (or Common Stock or other
securities or
property, as the case may be) as to which surrendered Rights
are
then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each Unit of Preferred
Stock
pursuant to the exercise of a Right shall initially be $13
and shall be subject to adjustment from time to time as
provided
in Section 11 hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase
and the
certificate duly executed, accompanied by payment, with
respect
to each Right so exercised, of the Purchase Price per Unit
of
Preferred Stock (or Common Stock, other securities or
property,
as the case may be) to be purchased as set forth below and
an
amount equal to any applicable transfer tax, the Rights
Agent
shall, subject to Section 20(k) hereof, thereupon promptly,
(i)
(A) requisition from any transfer agent of the Units of
Preferred
Stock (or make available, if the Rights Agent is the
transfer
agent for such shares) certificates for the total number of
Units
of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all
such
requests, or (B) if the Company shall have elected to
deposit the
total number of Units of Preferred Stock issuable upon
exercise
of the Rights hereunder with a depositary agent, requisition
from
the depositary agent depositary receipts representing such
number
of Units of Preferred Stock as are to be purchased (in which
case
certificates for the Units of Preferred Stock represented by
such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof,
(iii)
after receipt of such certificates or depositary receipts,
cause
the same to be delivered to or upon the order of the
registered
holder of such Rights Certificate, registered in such name
or
names as may be designated by such holder, and (iv) after
receipt
thereof, deliver such cash, if any, to or upon the order of
the
registered holder of such Rights Certificate. The payment
of the
Purchase Price (as such amount may be reduced (including to
zero)
pursuant to Section 11(a)(iii) hereof) may be made in cash
or by
certified bank check or bank draft payable to the order of
the
Company. In the event that the Company is obligated to
issue
other securities of the Company, pay cash and/or distribute
other
property pursuant to Section 11(a) hereof, the Company will
make
all arrangements necessary so that such other securities,
cash
and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate
shall exercise less than all the Rights evidenced thereby, a
new
Rights Certificate evidencing Rights equivalent to the
Rights
remaining unexercised shall be issued by the Rights Agent
and
delivered to, or upon the order of, the registered holder of
such
Rights Certificate, registered in such name or names as may
be
designated by such holder, subject to the provisions of
Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an
Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any
such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
Acquiring
Person becoming such and receives such Rights pursuant to
either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring
Person or to any Person with whom the Acquiring Person has
any
continuing agreement, arrangement or understanding regarding
the
transferred Rights or (B) a transfer which the Board of
Directors
of the Company has determined is part of a plan, arrangement
or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights
shall
have any rights whatsoever with respect to such Rights,
whether
under any provision of this Agreement or otherwise. The
Company
shall use all reasonable efforts to ensure that the
provisions of
this Section 7(e) and Section 4(b) hereof are complied with,
but
shall have no liability to any holder of Rights Certificates
or
any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates or Associates, or any transferee thereof,
hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a
registered
holder upon the occurrence of any purported exercise as set
forth
in this Section 7 unless such registered holder shall have
(i)
completed and signed the certificate contained in the form
of
election to purchase set forth on the reverse side of the
Rights
Certificate surrendered for such exercise and (ii) provided
such
additional evidence of the identity of the Beneficial Owner
(or
former Beneficial Owner) or Affiliates or Associates thereof
as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall,
if
surrendered to the Company or 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
Rights Certificates shall be issued in lieu thereof except
as
expressly permitted by any of the provisions of this
Agreement.
The Company shall deliver to the Rights Agent for
cancellation
and retirement, and the Rights Agent shall so cancel and
retire,
any other Rights Certificate purchased or acquired by the
Company
otherwise than upon the exercise thereof. The Rights Agent
shall
deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such
canceled Rights Certificates, and in such case shall deliver
a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of
Preferred
Stock.
(a) The Company covenants and agrees that it will
cause to
be reserved and kept available out of its authorized and
unissued
shares of Preferred Stock (or, following the occurrence of a
Triggering Event, out of its authorized and unissued
Preferred
Stock or other securities, as the case may be), the number
of
shares of Preferred Stock (or such other securities) that,
except
as provided in Section 11(a)(iii) hereof, will be sufficient
from
time to time to permit the exercise in full of all
outstanding
Rights and all Rights that are at the time issuable, in
accordance with the provisions of this Agreement.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, any other
securities) issuable and deliverable upon the exercise of
the
Rights may be listed on any national securities exchange,
the
Company shall use its best efforts to cause, from and after
such
time as the Rights become exercisable, all shares reserved
for
such issuance to be listed on such exchange upon official
notice
of issuance.
(c) The Company shall use its best efforts (i) to
file, as
soon as practicable following the earliest date after the
first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise
of the
Rights has been determined in accordance with Section
11(a)(ii)
and (iii) hereof, or as soon as is required by law following
the
Distribution Date, as the case may be, a registration
statement
under the Act on an appropriate form, with respect to the
securities purchasable upon exercise of the Rights, (ii) to
cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such
registration statement to remain effective (with a
prospectus at
all times meeting the requirements of the Act) until the
earlier
of (A) the date as of which the Rights are no longer
exercisable
for such securities, and (B) the Expiration Date. The
Company
will also take such action as may be appropriate under, or
to
ensure compliance with, the securities or "blue sky" laws of
the
various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period
of
time not to exceed ninety days after the date set forth in
clause
(i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file
such
registration statement and permit it to become effective.
Upon
any such suspension, the Company shall issue a public
announcement stating, and notify the Rights Agent, that the
exercisability of the Rights has been temporarily suspended.
The
Company shall also issue a public announcement at such time
as
the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights
shall not
be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take
all
such action as may be necessary to ensure that all shares of
Preferred Stock (or other securities, as the case may be)
delivered upon exercise of the Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment
of the Purchase Price), be duly authorized, validly issued,
fully
paid and nonassessable.
(e) The Company further covenants and agrees that it
will
pay when due and payable any and all federal and state
transfer
taxes and charges that may be payable in respect of the
issuance
or delivery of the Rights Certificates and of any
certificates
for shares of Preferred Stock (or other securities, as the
case
may be) 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 Rights
Certificates to
a Person other than, or the issuance or delivery of a number
of
shares of Preferred Stock (or other securities, as the case
may
be) in respect of a name other than that of, the registered
holder of the Rights Certificates evidencing Rights
surrendered
for exercise or to issue or deliver any certificates for a
number
of shares of Preferred Stock (or other securities, as the
case
may be) in a name other than that of the registered holder
upon
the exercise of any Rights until such tax shall have been
paid
(any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax
is
due.
Section 10. Preferred Stock Record Date.
Each person in whose name any certificate for a number
of
Units of Preferred Stock (or other securities, as the case
may
be) is issued upon the exercise of Rights shall for all
purposes
be deemed to have become the holder of record of such Units
of
Preferred Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated,
the
date upon which the Rights Certificate evidencing such
Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that
if
the date of such surrender and payment is a date upon which
the
Preferred Stock (or other securities, as the case may be)
transfer books of the Company are closed, such Person shall
be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which such
transfer
books are open. Prior to the exercise of the Rights
evidenced
thereby, the holder of a Rights Certificate as such shall
not be
entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any
preemptive
rights, and shall not be entitled to receive any notice of
any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind
of Shares or Number of Rights.
The Purchase Price, and the number and kind of shares
covered by each Right and the number of Rights outstanding
are
subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any
time
after the date of this Agreement (A) declare a dividend on
the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares,
or
(D) issue any shares of its capital stock in a
reclassification
of the Preferred Stock (including any such reclassification
in
connection with a consolidation or merger in which the
Company is
the continuing or surviving corporation), except as
otherwise
provided in this Section 11(a), the Purchase Price in effect
at
the time of the record date for such dividend or of the
effective
date of such subdivision, combination or reclassification,
and
the number and kind of shares of Preferred Stock or the
number
and kind of shares of other capital stock, as the case may
be,
issuable on such date, shall be proportionately adjusted so
that
the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then
in
effect, the aggregate number of shares of Preferred Stock or
the
number and kind of shares of other capital stock, as the
case may
be, that, if such Right had been exercised immediately prior
to
such date and at a time when the Preferred Stock transfer
books
of the Company were open, he would have owned upon such
exercise
and 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) Subject to Section 23 and Section 24 hereof,
in
the event any Person becomes an Acquiring Person, then,
proper
provision shall be made by the Company so that each record
holder
of each Right (except as provided in Section 7(e) hereof)
shall
thereafter have the right to receive, upon exercise thereof
for
the Purchase Price in accordance with terms of this
Agreement,
such number of Units of Preferred Stock (or, in lieu of
Preferred
Stock, at the option of the Company and to the extent
available,
such number of shares of Common Stock) as shall equal the
result
obtained by multiplying the Purchase Price by a fraction,
the
numerator of which is the number of Units of Preferred Stock
for
which a Right is then exercisable and the denominator of
which is
50% of the current market price of a share of Common Stock
(determined pursuant to Section 11(d) hereof) on the date of
the
first occurrence of a Section 11(a)(ii) Event (such result
being
hereinafter referred to as the "Adjustment Shares").
(iii) To the extent that the number of shares
of
Preferred Stock that are authorized by the Company's
certificate
of incorporation but not outstanding or reserved for
issuance for
purposes other than upon exercise of the Rights is not
sufficient
to permit the exercise in full of the Rights in accordance
with
the foregoing subparagraph (ii) of this Section 11(a), and
subject to such limitations as are necessary to prevent a
default
under any agreement for money borrowed as presently
constituted
to which the Company is a party and subject to any
limitations
contained in Section 170 of the Delaware General Corporation
Law,
the Company shall: (A) determine the excess of (1) the
value of
the Adjustment Shares issuable upon the exercise of a Right
(the
"Current Value"), over (2) the Purchase Price (such excess
being
hereinafter referred to as the "Spread"), and (B) with
respect to
each Right, make adequate provision to substitute for such
unavailable Adjustment Shares, upon payment of the
applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase
Price,
(3) other equity securities of the Company, (4) debt
securities
of the Company, (5) other assets, or (6) any combination of
the
foregoing, having, together with the Adjustment Shares
issued
upon exercise of such Right, an aggregate value equal to the
Current Value, where such aggregate value has been
determined by
the Board of Directors of the Company based upon the advice
of a
nationally recognized investment banking firm selected by
the
Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver
value
pursuant to clause (B) above within 30 days following the
first
occurrence of a Section 11(a)(ii) Event, then the Company
shall
be obligated to deliver, upon the surrender for exercise of
a
Right and without requiring payment of the Purchase Price,
shares
of Preferred Stock of the Company or Common Stock (to the
extent
such securities are available) and then, if necessary, cash,
which securities and/or assets in the aggregate are equal to
the
Spread. If the Board of Directors of the Company shall
determine
in good faith that it is likely that sufficient additional
shares
of preferred stock of the Company or Common Stock could be
authorized for issuance upon exercise in full of the Rights,
the
30 day period set forth above may be extended to the extent
necessary, but not more than 90 days following the first
occurrence of a Section 11(a)(ii) Event, in order that the
Company may seek stockholder approval for the authorization
of
such additional shares (such period, as it may be extended,
the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
first
and/or second sentences of this Section 11(a)(iii), the
Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and
(y)
may suspend the exercisability of the Rights until the
expiration
of the Substitution Period in order to seek any
authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and
to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement
stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as
the
suspension is no longer in effect. For purposes of this
Section
11(a)(iii), the value of the Common Stock shall be the
current
market price (as determined pursuant to Section 11(d)
hereof) per
share of the Common Stock on the date of the first
occurrence of
a Section 11(a)(ii) Event.
(b) If at any time after the date of this Agreement
the
Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock or of any
class or series of Equivalent Shares entitling such holders
(for
a period expiring within 45 calendar days after such record
date)
to subscribe for or to purchase Common Stock or Equivalent
Shares
(or securities convertible into Common Stock or Equivalent
Shares) at a price per share (or having a conversion price
per
share, if a security convertible into Common Stock or
Equivalent
Shares) less than the current market price of such Common
Stock
or Equivalent Shares on such record date, then, in each such
case, each Right outstanding immediately prior to such
record
date shall thereafter evidence the right to purchase, for
the
Purchase Price, that number of Units of Preferred Stock or
Equivalent Shares obtained by multiplying the number of
Units of
Preferred Stock issuable upon exercise of a Right
immediately
prior to such record date by a fraction, the numerator of
which
shall be the total number of shares of Common Stock and
Equivalent Shares (if any) outstanding on such record date
plus
the number of additional shares of Common Stock and
Equivalent
Shares (if any) to be offered for subscription or purchase
(or
into which the convertible securities so to be offered are
initially convertible) and the denominator of which shall be
the
total number of shares of Common Stock and Equivalent Shares
(if
any) outstanding on such record date plus the number of
shares of
Common Stock or Equivalent Shares, as the case may be, that
the
aggregate offering price of the total number of shares of
Common
Stock or Equivalent Shares, as the case may be, so to be
offered
(and/or the aggregate initial conversion price of the
convertible
securities so to be offered) would purchase at such current
market price. In case such subscription price may be paid
in a
consideration, part or all of which shall be in a form other
than
cash, the value of such consideration shall be as determined
in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the
Rights Agent. Common Stock and Equivalent Shares owned by
or
held for the account of the Company or any Subsidiary of the
Company shall not be deemed outstanding for the purpose of
any
such computation. Such adjustment shall be made
successively
whenever such a record date is fixed; and in the event that
such
rights, options or warrants are not so issued, each Right
shall
be adjusted to evidence the right to receive that number of
Units
of Preferred Stock that such Right would have entitled the
holder
to receive, for the Purchase Price, if such record date had
not
been fixed.
(c) If at any time after the date of this Agreement
the
Company shall fix a record date for the making of a
distribution
to all holders of Common Stock or of any class or series of
Equivalent Shares (including any such distribution made in
connection with a consolidation or merger in which the
Company is
the continuing or surviving corporation) of cash (other than
a
regular quarterly cash dividend of the Company in compliance
with
Section 170 of the Delaware General Corporation Law),
evidences
of indebtedness, assets, securities (other than Common Stock
or
any Equivalent Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)
hereof),
then, in each such case, each Right outstanding immediately
prior
to such record date shall thereafter evidence the right to
purchase, for the Purchase Price, that number of Units of
Preferred Stock obtained by multiplying the number of Units
of
Preferred Stock issuable upon exercise of a Right
immediately
prior to such record date by a fraction, the numerator of
which
shall be the current market price of a share of Common Stock
or
an Equivalent Share on the record date and the denominator
of
which shall be the current market price of a share of Common
Stock or an Equivalent Share on such record date less the
fair
market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described
in a statement filed with the Rights Agent) of the portion
of the
cash, evidences of indebtedness, assets or securities so to
be
distributed or of such subscription rights, options or
warrants
applicable to a share of Common Stock or an Equivalent
Share, as
the case may be. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that
such
distribution is not so made, each Right shall be adjusted to
evidence the right to receive that number of Units of
Preferred
Stock that such Right would have entitled the holder to
receive,
for the Purchase Price, if such record date had not been
fixed.
(d) (i) For the purpose of any computation
hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock
on
any date shall be deemed to be the average of the daily
closing
prices per share of such Common Stock for the 30 consecutive
Trading Days (as such term is hereinafter defined)
immediately
prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market
price"
per share of Common Stock on any date shall be deemed to be
the
average of the daily closing prices per share of such Common
Stock for the ten consecutive Trading Days immediately
following
such date; provided, however, that in the event that the
current
market price per share of the Common Stock is determined
during a
period following the announcement by the issuer of such
Common
Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible
into shares of such Common Stock (other than the Rights), or
(B)
any subdivision, combination or reclassification of such
Common
Stock, and prior to the expiration of the requisite 30
Trading
Day or ten Trading Day period, as set forth above, after the
ex-
dividend date for such dividend or distribution, or the
record
date for such subdivision, combination or reclassification,
then,
and in each such case, the "current market price" shall be
properly adjusted to take into account ex-dividend trading.
The
closing price for each day shall be the last sale price,
regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction
reporting system with respect to securities listed or
admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the
New
York Stock Exchange, as reported in the principal
consolidated
transaction reporting system with respect to securities
listed on
the principal national securities exchange on which the
shares of
Common Stock are listed or admitted to trading or, if the
shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if
not so
quoted, the average of the high bid and low asked prices in
the
over-the-counter market, as reported by the National
Association
of Securities Dealers, Inc. Automated Quotation System
("Nasdaq")
or such other system then in use, or, if on any such date
the
shares of Common Stock are not quoted by any such
organization,
the average of the closing bid and asked prices as furnished
by a
professional market maker making a market in the Common
Stock
selected by the Board of Directors of the Company. If on
any
such date no market maker is making a market in the Common
Stock,
the fair value of such shares on such date as determined in
good
faith by the Board of Directors of the Company shall be
used. The
term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common
Stock
are listed or admitted to trading is open for the
transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or
not so
listed or traded, "current market price" per share shall
mean the
fair value per share as determined in good faith by the
Board of
Directors of the Company, whose determination shall be
described
in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the
Common
Stock in Section 11(d)(i) hereof (other than the last
sentence
thereof). If the current market price per share of
Preferred
Stock cannot be determined in the manner provided above or
if the
Preferred Stock is not publicly held or listed or traded in
a
manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1000 (as such
number
may be appropriately adjusted for such events as stock
splits,
stock dividends and recapitalizations with respect to the
Common
Stock and Preferred Stock occurring after the date of this
Agreement) multiplied by the current market price per share
of
the Common Stock. If neither the Common Stock nor the
Preferred
Stock is publicly held or so listed or traded, "current
market
price" per share of the Preferred Stock shall mean the fair
value
per share as determined in good faith by the Board of
Directors
of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for
all purposes. For all purposes of this Agreement, the
"current
market price" of one one- thousandth of a share of Preferred
Stock
shall be equal to the "current market price" of one share of
Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding,
no
adjustment in the number of Units of Preferred Stock for
which a
Right is exercisable or in the Purchase Price shall be
required
unless such adjustment would require an increase or decrease
of
at least one percent in such number of shares or in the
Purchase
Price; provided, however, that any adjustments that by
reason of
this Section 11(e) are not required to be made shall be
carried
forward and taken into account in any subsequent adjustment.
All
calculations under this Section 11 shall be made to the
nearest
cent or to the nearest ten-thousandth of a Unit of Preferred
Stock, as the case may be. Notwithstanding the first
sentence of
this Section 11(e), any adjustment required by this Section
11
shall be made no later than the earlier of (i) three years
from
the date of the transaction that mandates such adjustment,
or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or 13(a) hereof, the holder of any Right
thereafter
exercised shall become entitled to receive any shares of
capital
stock other than Preferred Stock, thereafter the number of
such
other shares so receivable upon exercise of any Right and if
required, the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as
nearly
equivalent as practicable to the provisions with respect to
the
Preferred Stock contained in Section 11(a), (b), (c), (e),
(g),
(h), (i), (k) and (l) hereof, and the provisions of Sections
7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock
shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent
to any adjustment made to the number or kind of shares
purchasable upon exercise of the Rights or to the Purchase
Price
hereunder shall evidence the right to purchase, at the
adjusted
Purchase Price, the adjusted number of Units of Preferred
Stock
or other securities 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 below in this Section 11(h), upon each adjustment
of the
Purchase Price as a result of the calculations made in
Section
11(b) and (c), each Right outstanding immediately prior to
the
making of such adjustment shall thereafter evidence the
right to
purchase, at the adjusted Purchase Price, that number of
Units of
Preferred Stock obtained by (i) multiplying (x) the number
of
Units of Preferred Stock covered by a Right immediately
prior to
this adjustment by (y) the Purchase Price in effect
immediately
prior to such adjustment and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after
such
adjustment of the Purchase Price. On or after the date of
any
adjustment of the Purchase Price, in lieu of any adjustment
in
the number of Units of Preferred Stock or any other capital
stock
purchasable upon the exercise of a Right, the Company may
elect
to adjust the number of Rights. Each of the Rights
outstanding
after the adjustment in the number of Rights shall be
exercisable
for the number of Units of Preferred Stock for which a Right
was
exercisable immediately prior to such adjustment. Each
Right
held of record prior to such adjustment of the number of
Rights
shall become that number of Rights (calculated to the
nearest
one-ten-thousandth) obtained by dividing the Purchase Price
in
effect immediately prior to adjustment of the Purchase Price
by
the Purchase Price in effect immediately after adjustment of
the
Purchase Price. The Company shall make a public
announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time,
the
amount of the adjustment to be made. This record date may
be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been
issued,
shall be at least ten days later than the date of the public
announcement. If Rights Certificates have been issued, upon
each
adjustment of the number of Rights pursuant to this Section
11(h), the Company shall, as promptly as practicable, cause
to be
distributed to holders of record of Rights Certificates on
such
record date Rights Certificates evidencing, subject to
Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option
of the
Company, shall cause to be distributed to such holders of
record
in substitution and replacement for the Rights Certificates
held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights
Certificates so
to be distributed shall be issued, executed and
countersigned in
the manner provided for herein (and may bear, at the option
of
the Company, the adjusted Purchase Price) and shall be
registered
in the names of the holders of record of Rights Certificates
on
the record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the
Purchase Price or the number of Units of Preferred Stock or
the
number and kind of other securities issuable upon the
exercise of
the Rights, the Rights Certificates theretofore and
thereafter
issued may continue to express the Purchase Price per Unit,
the
number of Units and the other terms that were expressed in
the
initial Rights Certificates issued hereunder.
(j) In any case in which this Section 11 shall require
that
an adjustment 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 Units of
Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the
number of Units of Preferred Stock and other capital stock
or
securities of the Company, if any, issuable upon such
exercise
before giving effect to such adjustment; provided, however,
that
the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to
receive
such additional shares (fractional or otherwise) or
securities
upon the occurrence of the event requiring such adjustment.
(k) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the
extent that in its good faith judgment the Board of
Directors of
the Company shall determine to be advisable in order that
any (i)
consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at
less
than the current market price, (iii) issuance wholly for
cash of
shares of Preferred Stock or securities that by their terms
are
convertible into or exchangeable for shares of Preferred
Stock,
(iv) stock dividend or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by
the
Company to holders of its Preferred Stock shall not be
taxable to
such stockholders.
(l) The Company covenants and agrees that it shall
not, at
any time after the Distribution Date, (i) consolidate with
any
other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m) hereof), (ii)
merge
with or into any other Person (other than a Subsidiary of
the
Company in a transaction that complies with Section 11(m)
hereof), (iii) effect a statutory share exchange with any
Person
(other than a Subsidiary of the Company in a transaction
that
complies with Section 11(m) hereof), or (iv) sell or
transfer (or
permit any Subsidiary to sell or transfer), in one
transaction,
or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of
the
Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
complies
with Section 11(m) hereof), if at the time of or immediately
after such consolidation, merger, statutory share exchange
or
sale there are any rights, warrants or other instruments or
securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23
or Section 27 hereof, take (or permit any Subsidiary to
take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by
the
Rights.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any
time
after the Record Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding
Common Stock, or (iii) combine the outstanding Common Stock
into
a smaller number of shares, the number of Rights associated
with
each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date,
shall be
proportionately adjusted so that the number of Rights
thereafter
associated with each share of Common Stock following any
such
event shall equal the result obtained by multiplying the
number
of Rights associated with each share of Common Stock
immediately
prior to such event by a fraction the numerator of which
shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the
occurrence of
such event.
Section 12. Certificates of Adjusted Purchase Price
or
Number of Shares.
Whenever an adjustment is made as provided in Section
11 or
Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief
statement
of the facts accounting for such adjustment, (b) promptly
file
with the Rights Agent, and with each transfer agent for the
Preferred Stock or the Common Stock, a copy of such
certificate,
and (c) mail a brief summary thereof to each holder of a
Rights
Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock)
in
accordance with Section 25 hereof. The Rights Agent shall
be
fully protected in relying on any such certificate and on
any
adjustment therein contained, and shall not be deemed to
have
knowledge of any such adjustment unless and until it shall
have
received such a certificate.
Section 13. Consolidation, Merger or Sale or
Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (w) the Company shall
consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction that complies
with
Section 11(m) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (x) any Person (other than a Subsidiary of the
Company in
a transaction that complies with Section 11(m) hereof) shall
consolidate with, or merge with or into, the Company, and
the
Company shall be the continuing or surviving corporation of
such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding
shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, (y) the Company shall be a party to a statutory
share
exchange with any other Person (other than a Subsidiary of
the
Company in a transaction that complies with Section 11(m)
hereof)
after which the Company is a Subsidiary of any other Person,
or
(z) the Company shall sell or otherwise transfer (or one or
more
of its Subsidiaries shall sell or otherwise transfer), in
one
transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or
earning
power of the Company and its Subsidiaries (taken as a whole)
to
any Person or Persons (other than the Company or any
Subsidiary
of the Company in one or more transactions each of which
complies
with Section 11(m) hereof), then, and in each such case,
proper
provision shall be made so that: (i) each record holder of a
Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise
thereof
at the then current Purchase Price in accordance with the
terms
of this Agreement, such number of validly authorized and
issued,
fully paid, nonassessable and freely tradable shares of
Common
Stock of the Principal Party (as hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal
or
other adverse claims, as shall be equal to the result
obtained by
(1) multiplying the then current Purchase Price by the
number of
shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13
Event
(or, if a Section 11(a)(ii) Event has occurred prior to the
first
occurrence of a Section 13 Event, multiplying the number of
such
shares for which a Right was exercisable immediately prior
to the
first occurrence of a Section 11(a)(ii) Event by the
Purchase
Price in effect immediately prior to such first occurrence),
and
(2) dividing that product (which, following the first
occurrence
of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right for all purposes of this Agreement) by
50%
of the current market price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such
Principal
Party on the date of consummation of such Section 13 Event;
and
(ii) such Principal Party shall thereafter be liable for,
and
shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter be deemed to refer
to
such Principal Party, it being specifically intended that
the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section
13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
ensure that the provisions hereof shall thereafter be
applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall
be of no effect following the first occurrence of any
Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause
(w), (x) or (y) of the first sentence of Section 13(a)
hereof,
the Person that is the issuer of any securities into which
shares
of Common Stock of the Company are converted in such merger,
consolidation or statutory share exchange, and if no
securities
are so issued, the Person that is the other party to such
merger,
consolidation or statutory share exchange; and
(ii) in the case of any transaction described in
clause
(z) of the first sentence of Section 13(a) hereof, the
Person
that is the party receiving the greatest portion of the
assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1)
if
the Common Stock of such Person is not at such time and has
not
been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act, and such
Person
is a direct or indirect Subsidiary of another Person the
Common
Stock of which is and has been so registered, "Principal
Party"
shall refer to such other Person; and (2) in case such
Person is
a Subsidiary, directly or indirectly, of more than one
Person,
the Common Stocks of two or more of which are and have been
so
registered, "Principal Party" shall refer to whichever of
such
Persons is the issuer of the Common Stock having the
greatest
aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, statutory share exchange, sale or
transfer
unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been
issued
or reserved for issuance to permit the exercise in full of
the
Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have
executed
and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b)
of
this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger,
statutory share exchange or sale of assets mentioned in
paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under
the Act on an appropriate form with respect to the Rights
and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause
such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a
prospectus at all times meeting the requirements of the Act)
until the Expiration Date and similarly comply with
applicable
state securities laws; and
(ii) deliver to record holders of the Rights
historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply
to
successive mergers or consolidations or statutory share
exchanges
or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a
Section
11(a)(ii) Event, the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner
described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(n) hereof, or to distribute Rights Certificates
that
evidence fractional Rights. In lieu of such fractional
Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights
would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of
a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last
sale
price, regular way, or, in case no such sale takes place on
such
day, the average of the closing bid and asked prices,
regular
way, in either case as reported in the principal
consolidated
transaction reporting system with respect to securities
listed or
admitted to trading on the New York Stock Exchange or, if
the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on
the principal national securities exchange on which the
Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-
counter market, as reported by Nasdaq or such other system
then
in use or, if on any such date the Rights are not quoted by
any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of
the
Company. If on any such date no such market maker is making
a
market in the Rights, the fair value of the Rights on such
date
as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of
shares of Preferred Stock (other than fractions that are
integral
multiples of one one-thousandth of a share of Preferred
Stock)
upon exercise of the Rights or to distribute certificates
that
evidence fractional shares of Preferred Stock (other than in
such
integral multiples). In lieu of fractional shares of
Preferred
Stock that are not in such integral multiples, the Company
may
pay to the registered holders of Rights Certificates at the
time
such Rights are exercised as herein provided an amount in
cash
equal to the same fraction of the current market value of
one
one-thousandth of a share of Preferred Stock. For purposes
of
this Section 14(b), the current market value of one one-
thousandth
of a share of Preferred Stock shall be one one-thousandth of
the
current market price of a share of Preferred Stock (as
determined
pursuant to Section 11(d) hereof) for the Trading Day
immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right
expressly waives his right to receive any fractional Right
or any
fractional shares upon exercise of a Right, except as
permitted
by this Section 14.
Section 15. Rights of Action.
All rights of action in respect of this Agreement are
vested
in the respective registered holders of the Rights
Certificates
(and, prior to the Distribution Date, the registered holders
of
the Common Stock in respect of which Rights have been
issued);
and any registered holder of any Rights Certificate (or,
prior to
the Distribution Date, of such Common Stock), without the
consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of such
Common
Stock), may, in his own behalf and for his own benefit,
enforce,
and may institute and maintain any suit, action or
proceeding
against the Company to enforce, or otherwise act in respect
of,
his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights
Certificate and
in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and
shall
be entitled to specific performance of the obligations
hereunder
and injunctive relief against actual or threatened
violations of
the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and
agrees with the Company and the Rights Agent and with every
other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates
are transferable only on the registry books of the Rights
Agent
if surrendered at the principal office or offices of the
Rights
Agent designated for such purposes, duly endorsed or
accompanied
by a proper instrument of transfer and with the appropriate
forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the
Company and the Rights Agent may deem and treat the person
in
whose name a Rights Certificate (or, prior to the
Distribution
Date, the associated Common Stock certificate) is registered
as
the absolute owner thereof and of the Rights evidenced
thereby
(notwithstanding any notations of ownership or writing on
the
Rights Certificate or the associated Common Stock
certificate
made by anyone other than the Company or the Rights Agent)
for
all purposes whatsoever, and neither the Company, subject to
the
last sentence of Section 7(e) hereof, nor the Rights Agent
shall
be required to be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall
have any
liability to any holder of a Right or other Person as a
result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent
injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or
administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance
of
such obligation; provided, however, the Company must use its
best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder.
No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any
purpose
the holder of Units of Preferred Stock or any other
securities of
the Company that may at any time be issuable on the exercise
of
the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer
upon
the holder of any Rights Certificate, as such, any of the
rights
of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of
meetings
or other actions affecting stockholders (except as provided
in
Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by
such
Rights Certificate shall have been exercised in accordance
with
the provisions hereof.
Section 18. Concerning the Rights Agent.
(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 in the
premises.
(b) The Rights Agent shall be protected and shall
incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or
certificate
for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
instruction,
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.
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 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, however, that such corporation would be eligible
for
appointment as a successor Rights Agent under the provisions
of
Section 21 hereof. In case at the time such successor
Rights
Agent shall succeed to the agency created by this Agreement,
any
of the Rights Certificates shall have been countersigned but
not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver
such
Rights Certificates so countersigned; and in case at that
time
any of the Rights Certificates shall not have been
countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the
name
of the successor Rights Agent; and in all such cases such
Rights
Certificates shall have the full force provided in the
Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall
be changed and at such time any of the Rights Certificates
shall
have been countersigned but not delivered, the Rights Agent
may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that
time
any of the Rights Certificates shall not have been
countersigned,
the Rights Agent may countersign such Rights Certificates
either
in its prior name or in its changed name; and in all such
cases
such Rights Certificates shall have the full force provided
in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of
Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who
may be legal counsel for the Company), and the opinion of
such
counsel shall be full and complete authorization and
protection
to the Rights Agent as to any action taken or omitted by it
in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this
Agreement the Rights Agent shall deem it necessary or
desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of
"current market price") 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 the Chairman of
the
Board, any Vice-Chairman, the President, any Vice President,
the
Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the
Rights
Agent; and such certificate shall be full authorization to
the
Rights Agent for any action taken or suffered in good faith
by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder 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 Rights Certificates or be required to
verify
the same (except as to its countersignature on such Rights
Certificates), 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 any provision of this
Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its
countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this
Agreement
or in any Rights Certificate; nor shall it be responsible
for any
adjustment required under the provisions of Section 11 or
Section
13 hereof or responsible for the manner, method or amount of
any
such adjustment or the ascertaining of the existence of
facts
that would require any such adjustment (except with respect
to
the exercise of Rights evidenced by Rights Certificates
after
actual notice of any such adjustment); nor shall it by any
act
hereunder be deemed to make any representation or warranty
as to
the authorization or reservation of any shares of Preferred
Stock
to be issued pursuant to this Agreement or any Rights
Certificate
or as to whether any shares of Preferred Stock will, when so
issued, be duly authorized, validly 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 the Chairman, the President, any Vice
President,
the Secretary, any Assistant Secretary, the Treasurer or any
Assistant 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. At any time the Rights Agent may apply to the
Company
for written instructions with respect to any matter arising
in
connection with the Rights Agent's duties and obligations
arising
under this Agreement. Such application by the Rights Agent
for
written instructions from the Company may, at the option of
the
Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect to its
duties
or obligations under this Agreement and the date on and/or
after
which such action shall be taken and the Rights Agent shall
not
be liable for any action taken or omitted in accordance with
a
proposal included in any such application on or after the
date
specified therein (which date shall be not less than one
Business
Day after the Company receives such application, without the
Company's consent) unless, prior to taking or initiating any
such
action, the Rights Agent has received written instructions
in
response to such application specifying the action to be
taken or
omitted.
(h) The Rights Agent and any stockholder, director,
officer
or employee of the Rights Agent may buy, sell or deal in any
of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the
Company
may be interested, or contract with or lend money to the
Company
or otherwise act as fully and freely as though it were not
Rights
Agent under this Agreement. Nothing herein shall preclude
the
Rights Agent from acting in any other capacity for the
Company.
(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, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such
funds or
adequate indemnification against such risk or liability is
not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered
to the Rights Agent for exercise or transfer, the
certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed
or
indicates an affirmative response to clause 1 and/or 2
thereof,
the Rights Agent shall not take any further action with
respect
to such requested exercise of transfer without first
consulting
with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may
resign
and be discharged from its duties under this Agreement upon
30
days' notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock or Common Stock, by
registered or certified 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 Preferred
Stock or Common Stock, by registered or certified mail, and
to
the holders of the Rights Certificates by first-class mail.
If
the Rights Agent shall resign or be removed or shall
otherwise
become incapable of acting, the Company shall appoint a
successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice
of
such removal or after it has been notified in writing of
such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who
shall,
with such notice, submit his Rights Certificate for
inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction
for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court,
shall
be a corporation organized and doing business under the laws
of
the United States or of the State of Delaware or the State
of New
York (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 State of Delaware or the State of New York), in good
standing, having a principal office in the State of Delaware
or
the State of New York, that is authorized under such laws to
exercise corporate trust 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 $10,000,000. 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. Not
later
than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor
Rights
Agent and each transfer agent of the Common Stock, and mail
a
notice thereof in writing to the registered holders of the
Rights
Certificates. Failure to give any notice provided for in
this
Section 21, however, or any defect therein, shall not affect
the
legality or validity of the resignation or removal of the
Rights
Agent or the appointment of the successor Rights Agent, as
the
case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement
or
of the Rights to the contrary, the Company may, at its
option,
issue new Rights Certificates evidencing Rights in such form
as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind
or class of shares or other securities or property
purchasable
under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, the Company may,
if
deemed necessary or appropriate by the Board of Directors of
the
Company, issue Rights Certificates representing the
appropriate
number of Rights in connection with the issuance or sale of
shares of Common Stock following the Distribution Date.
Section 23. Redemption and Termination.
(a) (i) The Company may, at its option, at any
time
prior to the earlier of (A) the close of business on the
tenth
day following the Stock Acquisition Date, or (B) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights (which shall not include any rights that
have
become void pursuant to Section 7(e) hereof) at a redemption
price of $.01 per Right, as it may be appropriately adjusted
by
the Board of Directors of the Company to reflect any stock
split
or combination, stock dividend or similar transaction
occurring
after the date hereof (such redemption price being
hereinafter
referred to as the "Redemption Price") and the Company may,
at
its option, pay the Redemption Price either in shares of
Common
Stock (based on the current market price (as determined
pursuant
to Section 11(d) hereof) per share of the Common Stock at
the
time of redemption) or cash; provided, however, that if the
Board
of Directors of the Company authorizes redemption of the
Rights
in either of the circumstances set forth in clauses (x) and
(y)
below, then there must be Continuing Directors in office and
such
authorization shall require the concurrence of a majority of
such
Continuing Directors: (x) such authorization occurs on or
after
the date a Person becomes an Acquiring Person, or (y) such
authorization occurs on or after the date of a change
(resulting
from a proxy solicitation) in a majority of the directors in
office at the commencement of such solicitation if any
Person who
is a participant in such solicitation has stated (or, if
upon the
commencement of such solicitation, a majority of the Board
of
Directors of the Company has determined in good faith) that
such
Person (or any of its Affiliates or Associates) intends to
take,
or may consider taking, any action that would result in such
Person becoming an Acquiring Person or that would cause the
occurrence of a Triggering Event.
(ii) In addition, if there are Continuing
Directors
then in office, the Board of Directors may redeem all but
not
less than all of the then outstanding Rights at the
Redemption
Price with the concurrence of a majority of such Continuing
Directors, following the occurrence of a Stock Acquisition
Date
and following the expiration of the right of redemption
hereunder, if either (A) (1) a Person who is an Acquiring
Person
shall have transferred or otherwise disposed of a number of
shares of Common Stock in one transaction or a series of
transactions not directly or indirectly involving the
Company or
any of its Subsidiaries, such that such Person is thereafter
a
Beneficial Owner of less than 20% of the outstanding shares
of
Common Stock and (2) there are no other Persons, immediately
following the occurrence of the event described in clause
(1),
who are Acquiring Persons, or (B) in connection with the
type of
transaction specified in Section 13(a) hereof in which all
holders of Common Stock are treated alike and not involving
an
Acquiring Person or an Affiliate or Associate of an
Acquiring
Person or any other Person in which such Acquiring Person,
Affiliate or Associate has any interest, or any other Person
acting directly or indirectly on behalf of or in association
with
any such Acquiring Person, Affiliate or Associate.
Notwithstanding anything contained in this Agreement to
the
contrary, the Rights shall not be exercisable after the
first
occurrence of a Triggering Event until such time as the
Company's
right of redemption under subsection (i) above is not
exercisable.
(b) Immediately upon the action of the Board of
Directors
of the Company authorizing the redemption of the Rights
pursuant
to subsection (a) of this Section 23 and without any further
action and without any notice, the right to exercise the
Rights
shall terminate and the only right thereafter of a holder of
such
Rights shall be to receive the Redemption Price for each
Right so
held. Promptly after the action of the Board of Directors
authorizing the redemption of the Rights, the Company shall
give
notice of such redemption to the Rights Agent and to the
holders
of such Rights by mailing such notice to all such holders at
each
holder's last address as it appears upon the registry books
of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock.
Any
notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each
such notice of redemption shall state the method by which
the
payment of the Redemption Price will be effected.
Section 24. Exchange.
(a) The Company may, at its option, by resolution of
its
Board of Directors, at any time (including a time after any
Person becomes an Acquiring Person), exchange all or part of
the
then outstanding and exercisable Rights (which shall not
include
Rights that have become void pursuant to Section 7(e)
hereof) for
shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect
any
stock split, stock dividend or similar transaction occurring
with
respect to the Common Stock after the date hereof (such
exchange
ratio being hereinafter referred to as the "Exchange
Ratio");
provided, however, under the circumstances described in the
proviso to Section 23(a)(i) hereof, an Exchange shall be
effective only if there are Continuing Directors and shall
require the concurrence of a majority of such Continuing
Directors.
(b) Immediately upon the action of the Board of
Directors
of the Company authorizing the exchange of the Rights
pursuant to
subsection (a) of this Section 24 and without any further
action
and without any notice, the right to exercise the Rights
will
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common
Stock
equal to the number of Rights held by such holder multiplied
by
the Exchange Ratio. Promptly after the action of the Board
of
Directors authorizing the exchange of the Rights, the
Company
shall give notice of such exchange to the Rights Agent and
to the
holders of such Rights by mailing such notice to all such
holders
at each holder's last address as it appears upon the
registry
books of the Rights Agent or, prior to the Distribution
Date, on
the registry books of the transfer agent for the Common
Stock.
Any notice that is mailed in the manner herein provided
shall be
deemed given, whether or not the holder receives the notice.
Each
such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be
effected.
(c) In the event that there shall not be sufficient
shares
of Common Stock authorized but unissued to permit the
exchange in
full of such Rights in accordance with this Section 24, the
Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance
upon
exchange of the Rights. In the event the Company shall,
after
good faith effort, be unable to take all such action as may
be
necessary to authorize such additional shares of Common
Stock,
the Company shall substitute, for each share of Common Stock
that
would otherwise be issuable upon exchange of a Right, a
number of
shares of other equity securities of the Company or fraction
thereof such that the current per share market price of one
share
of such other equity securities multiplied by such number or
fraction is equal to the current per share market price of
one
share of Common Stock as of the date of issuance of such
shares
of such other equity securities or fraction thereof.
(d) The Company shall not be required to issue
fractions of
shares of Common Stock or to distribute certificates that
evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, there shall be paid to
the
registered holders of the Right Certificates with regard to
which
such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of
the
current market value of a whole share of Common Stock. For
the
purposes of this subsection (d), the current market value of
a
whole share of Common Stock shall be the closing price of a
share
of Common Stock (as determined pursuant to Section 11(d)
hereof)
for the Trading Day immediately prior to the Exchange Date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after
the Distribution Date, (i) to pay any dividend payable in
stock
of any class to the holders of Preferred Stock or to make
any
other distribution to the holders of Preferred Stock (other
than
a regular quarterly cash dividend of the Company in
compliance
with Section 170 of the Delaware General Corporation Law),
or
(ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional
shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding
shares of Preferred Stock), or (iv) to effect any
consolidation
or merger into or with any other Person (other than a
Subsidiary
of the Company in a transaction that complies with Section
11(m)
hereof), or to effect a statutory share exchange with any
Person
(other than a Subsidiary of the Company in a transaction
that
complies with Section 11(m) hereof), 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 transaction or a
series of related 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 (other than a
Subsidiary of
the Company in one or more transactions each of which
complies
with Section 11(m) hereof), or (v) to effect the
liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which
shall
specify the record date for the purposes of such stock
dividend,
distribution of rights or warrants, or the date on which
such
reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution, or
winding up
is to take place and the date of participation therein by
the
holders of the shares of Preferred Stock, if any such date
is to
be fixed, and such notice shall be so given in the case of
any
action covered by clause (i) or (ii) above at least 20 days
prior
to the record date for determining holders of the shares of
Preferred Stock 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 shares of Preferred Stock
whichever
shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur,
then,
in any such case, (i) the Company shall as soon as
practicable
thereafter give to each holder of a Rights Certificate, to
the
extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify
the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in
the
preceding paragraph to Preferred Stock shall be deemed
thereafter
to refer, if appropriate, not only to Preferred Stock but
also to
Common Stock or other securities.
Section 26. Notices.
Notices or demands authorized by this Agreement to be
given
or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given
or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights
Agent)
as follows:
InteliData Technologies Corporation
13100 Worldgate Drive
Suite 600
Herndon, Virginia 20170
Attention: Albert N. Wergley, Esq.
Subject to the provisions of Section 21 hereof, any notice
or
demand authorized by this Agreement to be given or made by
the
Company or by the holder of any Rights Certificate to or on
the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Issac Kagin
Notices or demands authorized by this Agreement to be given
or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date,
to the
holder of certificates representing shares of Common Stock)
shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of
such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
Prior to the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may,
and the
Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval
of any
holders of certificates representing shares of Common Stock.
From
and after the Distribution Date and subject to the
penultimate
sentence of this Section 27, the Company and the Rights
Agent
shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to
correct
or supplement any provision contained herein that may be
defective or inconsistent with any other provisions herein,
(iii)
to shorten or lengthen any time period hereunder (which
lengthening or shortening, under the circumstances described
in
the proviso to Section 23(a)(i) hereof, shall be effective
only
if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors), or
(iv)
to change or supplement the provisions hereunder in any
manner
that the Company may deem necessary or desirable and that
shall
not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate
or
Associate of an Acquiring Person); provided, that this
Agreement
may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to
when
the Rights may be redeemed at such time as the Rights are
not
then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the
holders of
Rights. Upon the delivery of a certificate from an
appropriate
officer of the Company that states that the proposed
supplement
or amendment is in compliance with the terms of this Section
27,
the Rights Agent shall execute such supplement or amendment.
No
supplement or amendment shall be made that changes the
Redemption
Price, the Final Expiration Date, the Purchase Price or the
number of shares of Common Stock for which a Right is
exercisable; provided, however, that at any time prior to
the
Distribution Date, the Board of Directors of the Company may
amend this Agreement to increase the Purchase Price or
extend the
Final Expiration Date. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed
coincident
with the interests of the holders of Common Stock.
Section 28. Successors.
All the covenants and provisions of this Agreement by
or for
the benefit of the Company or the Rights Agent shall bind
and
inure to the benefit of their respective successors and
assigns
hereunder.
Section 29. Determinations and Actions by the Board
of
Directors, etc.
For all purposes of this Agreement, any calculation of
the
number of shares of Common Stock outstanding at any
particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of
which
any Person is the Beneficial Owner, shall be made in
accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (and, where specifically provided
for
herein, the Continuing Directors) shall have the exclusive
power
and authority to administer this Agreement and to exercise
all
rights and powers specifically granted to the Board, or the
Company (or, where specifically provided for herein, the
Continuing Directors), or as may be necessary or advisable
in the
administration of this Agreement, including, without
limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary
or
advisable for the administration of this Agreement
(including a
determination to redeem or not redeem the Rights or to amend
the
Agreement). All such actions, calculations, interpretations
and
determinations (including, for purposes of clause (y) below,
all
omissions with respect to the foregoing) which are done or
made
by the Board (or, where specifically provided for herein, by
the
Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not
subject
the Board or the Continuing Directors to any liability to
the
holders of the Rights.
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, the
registered
holders from time to time of the Rights Certificates (and,
prior
to the Distribution Date, registered holders of the Common
Stock)
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 and the Persons specified above.
Section 31. Severability.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or
other
authority to be invalid, void or unenforceable, the
remainder of
the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in
no
way be affected, impaired or invalidated; provided, however,
that
notwithstanding anything in this Agreement to the contrary,
if
any such term, provision, covenant or restriction is held by
such
court or authority to be invalid, void or unenforceable and
the
Board of Directors of the Company determines in its good
faith
judgment that severing the invalid language from this
Agreement
would adversely affect the purpose or effect of this
Agreement,
the right of redemption set forth in Section 23 hereof shall
be
reinstated and shall not expire until the close of business
on
the tenth day following the date of such determination by
the
Board of Directors.
Section 32. Governing Law.
This Agreement, each Right and each Rights Certificate
issued hereunder shall be deemed to be a contract made under
the
laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and to be
performed entirely within the State of Delaware.
Section 33. Counterparts.
This Agreement may be executed in any number of
counterparts
and each of such counterparts shall for all purposes be
deemed to
be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not
control
or affect the meaning or construction of any of the
provisions
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year
first
above written.
INTELIDATA TECHNOLOGIES
CORPORATION
By: /s/John C. Backus, Jr.
John C. Backus, Jr.
President and Chief Executive
Officer
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/Herbert J. Lemmer
Name: Herbert J. Lemmer
Title: Vice President
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _________
Rights
NOT EXERCISABLE AFTER JANUARY 21, 2008, OR EARLIER IF
REDEEMED OR
EXCHANGED BY THE COMPANY. THE COMPANY, AT ITS OPTION, MAY
REDEEM
THE RIGHTS EVIDENCED BY THIS CERTIFICATE AT A REDEMPTION
PRICE OF
$.01 PER RIGHT OR EXCHANGE THE RIGHTS FOR SHARES OF COMMON
STOCK
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON.
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED
HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION
7(e) OF THE RIGHTS AGREEMENT.]1
Rights Certificate
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 January 21, 1998 (the "Rights
Agreement"),
between InteliData Technologies Corporation, a Delaware
corporation (the "Company"), and American Stock Transfer &
Trust
Company, a New York corporation (the "Rights Agent"), to
purchase
from the Company at any time prior to 5:00 P.M. New York
City
time on January 21, 2008 at the office or offices of the
Rights
Agent designated for such purpose, or its successors as
Rights
Agent, one one-thousandth of a fully paid, non-assessable
share (a
"Unit") of Series A Cumulative Preferred Stock (the
"Preferred
Stock") or other securities of the Company, at a purchase
price
of $13 per Unit (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed.
(All
capitalized terms not defined herein shall have the meaning
set
forth in the Rights Agreement.) The Purchase Price may be
paid
in cash or by certified bank check or bank draft payable to
the
order of the Company. The number of Rights evidenced by
this
Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of ______ __, [199_], based on the
Preferred
Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price
and
the number and kind of shares of Preferred Stock or other
securities that may be purchased upon the exercise of the
Rights
evidenced by this Rights Certificate are subject to
modification
and adjustment upon the happening of certain events,
including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which
terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights
Agreement
reference is hereby made for a full description of the
rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders
of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights
under
the specific circumstances set forth in the Rights
Agreement.
Under certain circumstances specified in Section 7(e) of the
Rights Agreement, Rights that are or were owned by an
Acquiring
Person or an Affiliate or Associate of an Acquiring Person
may
become null and void and no longer exercisable by any Person
(including any subsequent transferee). Copies of the Rights
Agreement are on file at the above-mentioned office of the
Rights
Agent and are also available upon written request to the
Rights
Agent or the Secretary of the Corporation.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or
offices
of the Rights Agent designated for such purpose, may be
exchanged
for another Rights Certificate or Rights Certificates of
like
tenor and date evidencing Rights entitling the holder to
purchase
a like aggregate number of Units of Preferred Stock as the
Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered then entitle such holder to purchase. If this
Rights
Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole
Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Company, at its option, may redeem the Rights evidenced by
this
Certificate at a redemption price of $.01 per Right or
exchange
the Rights for shares of Common Stock.
No fractional shares of Preferred Stock will be issued
upon
the exercise of any Right or Rights evidenced hereby (other
than
fractions that are integral multiples of one one-thousandth
of a
share of Preferred Stock), but in lieu thereof a cash
payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled
to
vote or receive dividends or be deemed for any purpose the
holder
of shares of Preferred Stock 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 any corporate action, or to receive notice of
meetings
or other actions affecting stockholders (except as provided
in
the Rights Agreement), or to receive dividends or
subscription
rights, or otherwise, until the Right or Rights evidenced by
this
Rights Certificate shall have been exercised as provided in
the
Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for
any purpose until it shall have been countersigned by the
Rights
Agent.
WITNESS the facsimile signatures of the proper officers
of
the Company and its corporate seal.
Dated as of ___________ __, ______
[SEAL]
ATTEST: INTELIDATA TECHNOLOGIES
CORPORATION
_____________________ By:__________________________
Secretary John C. Backus, Jr.
President and Chief Executive
Officer
Countersigned:
AMERICAN STOCK TRANSFER & TRUST
By:__________________________________
Authorized Signature
1/ The bracketed language shall be inserted only if
applicable.
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells,
assigns
and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________, ____
________________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold,
assigned and transferred by or on behalf of a Person who is
or
was an Acquiring Person or an Affiliate or Associate of any
such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _______________, ____
_____________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration
or
enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: INTELIDATA TECHNOLOGIES CORPORATION:
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Rights Certificate
to
purchase the shares of Preferred Stock issuable upon the
exercise
of the Rights (or such other securities of the Company or of
any
other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or
other
securities) be issued in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights
Certificate
for the balance of such Rights shall be registered in the
name of
and delivered to:
Please insert social security or other identifying number
(Please print name and address)
(Please print name and address)
Date: _______________, ____
___________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [
]
are [ ] are not being exercised by or on behalf of a Person
who
is or was an Acquiring Person or an Affiliate or Associate
of any
such Acquiring Person (as such terms are defined pursuant to
the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced
by this Rights Certificate from any Person who is, was or
became
an Acquiring Person or an Affiliate or Associate of an
Acquiring
Person.
Dated: _________________, ____
____________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the
face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On January 21, 1998, the Board of Directors of
InteliData
Technologies Corporation, a corporation organized under the
laws
of the State of Delaware (the "Company"), approved a Rights
Agreement, dated as of and to be effective on January 21,
1998
(the "Rights Agreement"), between the Company and American
Stock
Transfer & Trust Company, as Rights Agent, having the
principal
terms summarized below. In accordance with the Rights
Agreement,
the Board also declared a dividend distribution of one Right
for
each outstanding share of common stock (the "Common Stock"),
of
the Company to stockholders of record at the close of
business on
February 6, 1998 (the "Record Date").
Each Right entitles the registered holder to purchase
from
the Company one one-thousandth of a share of the Company's
Series
A Cumulative Preferred Stock ("Preferred Stock"). Each one
one-
thousandth of a share (a "Unit") of Preferred Stock is
structured
to be the equivalent of one share of Common Stock of the
Company
("Common Stock"). Stockholders will receive one Right per
share
of Common Stock held of record at the close of business on
the
Record Date. The exercise price of the Right will be $13
subject to adjustment (the "Purchase Price").
Rights will also attach to shares of Common Stock
issued
after the Record Date but prior to the Distribution Date
unless
the Board of Directors determines otherwise at the time of
issuance. The description and terms of the Rights are set
forth
in the Rights Agreement.
The Rights will be appurtenant to the shares of Common
Stock
and will be evidenced by Common Stock certificates, and no
separate certificates evidencing the Rights (the "Rights
Certificates") will be distributed initially. The Rights
will
separate from the Common Stock and a distribution of the
Rights
Certificates will occur (the "Distribution Date") upon the
earlier of (i) 10 days following a public announcement that
a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the
outstanding
shares of Common Stock (the "Stock Acquisition Date"), or
(ii) 10
business days following the commencement of a tender offer
or
exchange offer that would result in a person or group
beneficially becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the
Common
Stock certificates and will be transferred with and only
with
such Common Stock certificates, (ii) any Common Stock
certificates issued will contain a notation incorporating
the
Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding
will
also constitute the transfer of the Rights associated with
the
Common Stock represented by such certificates.
WorldCorp, Inc. ("WorldCorp"), the beneficial owner of
approximately 29% of the Company's Common Stock, as of the
date
hereof, is specifically excluded from the definition of
Acquiring
Person, subject to certain conditions. WorldCorp shall be
deemed
an Acquiring Person, if at any time during which WorldCorp
beneficially owns 20% or more of the Common Stock, (i) there
is
not a majority of Continuing Directors(as defined below)
currently serving on the Board of Directors of WorldCorp,
(ii)
the slate of directors nominated for election to the Board
of
WorldCorp, whose nomination was recommended or approved by
the
majority of the Continuing Directors of WorldCorp serving at
the
time of such nomination or election, at any annual or
special
meeting of the stockholders called for the purpose of
electing
directors, shall not be elected or (iii) a slate of
directors
not nominated by the majority of Continuing Directors of
WorldCorp serving at the time of such nomination or election
shall be elected at such meeting.
The Rights are not exercisable until the Distribution
Date
and will expire at the close of business on January 21,
2008,
unless earlier redeemed or exchanged by the Company as
described
below. As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of
the
Common Stock as of the close of business on the Distribution
Date, and thereafter such separate Rights Certificates alone
will
represent the Rights.
While each Right will initially provide for the
acquisition
of one Unit of Preferred Stock at the Purchase Price, the
Agreement provides that if any person becomes an Acquiring
Person, proper provision shall be made so that each holder
of a
Right (except as set forth below) will thereafter have the
right
to receive, upon exercise and payment of the Purchase Price,
Preferred Stock or, at the option of the Company, Common
Stock
(or, in certain circumstances, cash, property or other
securities
of the Company) having a value equal to twice the amount of
the
Purchase Price.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger,
statutory share exchange, or other business combination in
which
the Company is not the surviving corporation, or (ii) 50% or
more
of the Company's assets or earning power is sold or
transferred,
each holder of a Right (except as set forth below) shall
thereafter have the right to receive, upon exercise and
payment
of the Purchase Price, common stock of the acquiring company
having a value equal to twice the Purchase Price. The
events set
forth in this paragraph and in the immediately preceding
paragraph are referred to as the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles
Rights holders to purchase securities or assets of the
Company,
Rights that are or were owned by the Acquiring Person, or
any
affiliate or associate of such Acquiring Person, on or after
such
Acquiring Person's Stock Acquisition Date shall be null and
void
and shall not thereafter be exercised by any person
(including
subsequent transferees). Upon the occurrence of a
Triggering
Event that entitles Rights holders to purchase common stock
of a
third party, or upon the authorization of an Exchange,
Rights
that are or were owned by any Acquiring Person or any
affiliate
or associate of any Acquiring Person on or after such
Acquiring
Person's Stock Acquisition Date shall be null and void and
shall
not thereafter be exercised by any person (including
subsequent
transferees).
The Purchase Price payable, and the number of shares of
Preferred Stock, Common Stock or other securities or
property
issuable upon exercise of the Rights are subject to
adjustment
from time to time to prevent dilution.
At any time (including a time after any person becomes
an
Acquiring Person), the Company may exchange all or part of
the
Rights (except as set forth below) for shares of Common
Stock (an
"Exchange") at an exchange ratio of one share per Right, as
appropriately adjusted to reflect any stock split or similar
transaction.
At any time until ten days following the Stock
Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights
Agreement,
the decision to make an Exchange or to redeem the Rights
shall
require the concurrence of a majority of the Continuing
Directors
(as defined below). Additionally, the Company may
thereafter but
prior to the occurrence of a Triggering Event redeem the
Rights
in whole, but not in part, at the Redemption Price provided
that
such redemption is incidental to a merger or other business
combination transaction involving the Company that is
approved by
a majority of the Continuing Directors, does not involve an
Acquiring Person, and in which all holders of Common Stock
are
treated alike. After the redemption period has expired, the
Company's right of redemption may be reinstated if an
Acquiring
Person reduces his beneficial ownership to less than 10% of
the
outstanding shares of Common Stock in a transaction or
series of
transactions not involving the Company. Immediately upon
the
action of the Board ordering redemption of the Rights, with,
where required, the concurrence of the Continuing Directors,
the
Rights will terminate and the only right of the holders of
Rights
will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the
Board, or the Board of Directors of WorldCorp, Inc. (the
"WorldCorp Board"), as the case may be, who was a member of
the
Board or the WorldCorp Board, immediately before the
adoption of
the Rights Agreement, and any person who is subsequently
elected
to the Board or the WorldCorp Board, if such person is
recommended or approved by a majority of the Continuing
Directors, but does not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any
representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as
such,
will have no rights as a stockholder of the Company,
including,
without limitation, the right to vote or to receive
dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending
upon
the circumstances, recognize taxable income in the event
that the
Rights become exercisable for Preferred Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the
Rights
Agreement may be amended by the Board prior to the
Distribution
Date. After the Distribution Date, the provisions of the
Rights
Agreement may be amended by the Board (in certain
circumstances,
only with the concurrence of the Continuing Directors) in
order
to cure any ambiguity, to make certain other changes that do
not
adversely affect the interests of holders of Rights
(excluding
the interests of any Acquiring Person), or to shorten or
lengthen
any time period under the Rights Agreement; provided,
however, no
amendment to adjust the time period governing redemption may
be
made at such time as the Rights are not redeemable.
