<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 18, 1996
Registration Statement No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ECHELON INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
FLORIDA 59-2554218
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
ONE PROGRESS PLAZA
SUITE 2400
ST. PETERSBURG, FLORIDA 33701
(813) 824-6767
(Address, including zip code,
of Registrant's principal executive offices)
ECHELON INTERNATIONAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
DARRYL A. LECLAIR, PRESIDENT
ECHELON INTERNATIONAL CORPORATION
ONE PROGRESS PLAZA, SUITE 2400
ST. PETERSBURG, FLORIDA 33701
(813) 824-6767
(Name, address, including zip code, and telephone number
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
to be Registered Registered Price Per Share(1) Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(2) . . . . . 75,000 shs. $13.81 $1,035,750 $314
====================================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c), solely for the purpose of
calculating the registration fee. Based upon the average of the
high and low prices for the common stock reported by the New York
Stock Exchange on December 12, 1996.
(2) Includes rights to purchase units of Series A Junior Participating
Preferred Stock.
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
By this reference, the following documents filed or to be filed by
Echelon International Corporation (the "Company") with the Securities and
Exchange Commission (the "Commission") are incorporated into and made a part of
this Registration Statement:
1. The Company's Registration Statement on Form 10, as amended,
(Registration No. 001-12211).
2. The description of the capital stock of the Company contained on
page 61 of Exhibit 2.1 to the Company's Registration Statement on
Form 10, as amended, (Registration No. 001-12211).
3. All documents filed by the Company with the Commission subsequent
to the date of this Registration Statement under Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, and
prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be
incorporated into and made a part of this Registration Statement
from the date of filing of such documents with the Commission.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act, as amended (the "Florida Act"),
provides that, in general, a business corporation may indemnify any person who
is or was a party to any proceeding (other than an action by, or in the right
of, the corporation) by reason of the fact that he or she is or was a director
or officer of the corporation, against liability incurred in connection with
such proceeding, including any appeal thereof, provided certain standards are
met, including that such officer or director acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and provided further that, with respect to any
criminal action or proceeding, the officer or director had no reasonable cause
to believe his or her conduct was unlawful. In the case of proceedings by or
in the right of the corporation, the Florida Act provides that, in general, a
corporation may indemnify any person who was or is a party to any such
proceeding by reason of the fact that he or she is or was a director or officer
of the corporation against expenses and amounts paid in settlement actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof, provided that such person acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no
indemnification shall be made in respect of any claim as to which such person
is adjudged liable unless a court of competent jurisdiction determines upon
application that such person is
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<PAGE> 3
fairly and reasonably entitled to indemnity. To the extent that any officers or
directors are successful on the merits or otherwise in the defense of any of the
proceedings described above, the Florida Act provides that the corporation is
required to indemnify such officers or directors against expenses actually and
reasonably incurred in connection therewith. However, the Florida Act further
provides that, in general, indemnification or advancement of expenses shall not
be made to or on behalf of any officer or director if a judgment or other final
adjudication establishes that his or her actions, or omissions to act, were
material to the cause of action so adjudicated and constitute: (i) a violation
of the criminal law, unless the director or officer had reasonable cause to
believe his or her conduct was lawful or had no reasonable cause to believe it
was unlawful; (ii) a transaction from which the director or officer derived an
improper personal benefit; (iii) in the case of a director, a circumstance under
which the director has voted for or assented to a distribution made in violation
of the Florida Act or the corporation's articles of incorporation; or (iv)
willful misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation to procure a
judgment in its favor or in a proceeding by or in the right of a shareholder.
The Company By-laws provide that the Company shall have the power but
not the obligation to indemnify directors and officers to the fullest extent
permitted by the laws of the State of Florida. The Company has entered into
indemnification agreements with all of its executive officers and directors
and, as permitted by applicable law. These indemnification agreements clarify
and expand the circumstances under which a director or executive officer will
be indemnified.
The indemnification rights conferred by the By-laws and indemnification
agreements are not exclusive of any other right, under the Florida Act or
otherwise, to which a person seeking indemnification may otherwise be entitled.
The Company will also provide liability insurance for the directors and
officers for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers.
The effect of such indemnification arrangements may be to exempt or
limit the liability of such executive officers and directors to the Company or
its stockholders for monetary damages for breach of fiduciary duty to the
Company, except to the extent such exemption or limitation is not permitted
under the Florida Act as the same exists or may hereafter be amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
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<PAGE> 4
ITEM 8. EXHIBITS.
Exhibit
Number Description
4.1 Amended and Restated Articles of Incorporation of the Company and
amendments thereto.
4.2 Amended and Restated By-Laws of the Company
4.3 Specimen Common Share certificate (incorporated herein by
reference to Exhibit 4.1 to the Company's Registration Statement
on Form 10, as amended, (No. 001-12211))
4.4 Rights Agreement between Echelon International Corporation and The
First National Bank of Boston, as Rights Agent
4.5 Right Certificate (attached as Exhibit B to the Rights Agreement
filed as Exhibit 4.4 hereto)
5 Opinion of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis,
Professional Association, as to the legality of the Common Stock
being registered
23.1 Consent of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis,
Professional Association (contained in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
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<PAGE> 5
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described in
Item 6, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. Petersburg, State of Florida, on the 18th
day of December, 1996.
ECHELON INTERNATIONAL CORPORATION
By: /S/ Darryl A. LeClair
---------------------------------------
Darryl A. LeClair, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned officers and
directors of Echelon International Corporation, a Florida corporation, for
himself and not for one another, does hereby constitute and appoint Darryl A.
LeClair, W. Michael Doramus and Larry J. Newsome, each of them, a true and
lawful attorney in his name, place and stead, in any and all capacities, to
sign his name to any and all amendments, including post-effective amendments,
to this registration statement, and to cause the same to be filed with the
Securities and Exchange Commission, granting unto said attorneys and each of
them full power and authority to do and perform any act and thing necessary and
proper to be done in the premises, as fully to all intents and purposes as the
undersigned could do if personally present, and each of the undersigned for
himself hereby ratifies and confirms all that said attorneys or any one of them
shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ W. Michael Doramus
______________________________ Chairman of the Board December 18, 1996
W. Michael Doramus and Director
/s/ Darryl A. LeClair
______________________________ President, Chief Executive December 18, 1996
Darryl A. LeClair Officer and Director
(Principal Executive Officer)
/s/ Larry J. Newsome
______________________________ Senior Vice President, Chief December 18, 1996
Larry J. Newsome Financial Officer, Secretary and
Treasurer (Principal Financial
Officer
/s/ James R. Hobbs, Jr. Vice President and December 18, 1996
______________________________ Controller
James R. Hobbs, Jr. (Principal Accounting
Officer)
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
______________________________ Director December , 1996
Thomas W. Mahr
/s/ Joseph H. Richardson
______________________________ Director December 18, 1996
Joseph H. Richardson
</TABLE>
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<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- -------- ----------- -----------
<S> <C> <C>
4.1 Amended and Restated Articles of Incorporation of the Company
and amendments thereto
4.2 Amended and Restated By-Laws of the Company
4.3 Specimen Common Share certificate (incorporated herein by
reference to Exhibit 4.1 to the Company's Registration Statement
on Form 10, as amended, (No. 001-12211))
4.4 Rights Agreement between Echelon International Corporation and
The First National Bank of Boston, as Rights Agent
4.5 Right Certificate (attached as Exhibit B to the Rights Agreement
filed as Exhibit 4.4 hereto)
5 Opinion of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill &
Mullis, Professional Association, as to the legality of the
Common Stock being registered
23.1 Consent of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill &
Mullis, Professional Association (contained in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
</TABLE>
II-8
<PAGE> 1
EXHIBIT 4.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ECHELON INTERNATIONAL CORPORATION
ARTICLE I
NAME
The name of this Corporation shall be:
ECHELON INTERNATIONAL CORPORATION
ARTICLE II
TERM OF EXISTENCE
This Corporation is to exist perpetually.
ARTICLE III
GENERAL PURPOSE
The general purpose for which this Corporation is organized is the
transaction of any and all lawful business for which corporations may be
incorporated under the Business Corporation Act of the State of Florida, and
any amendments or successor thereto, and in connection therewith, this
Corporation shall have and may exercise any and all powers conferred from time
to time by law upon corporations formed under such Act.
ARTICLE IV
CAPITAL STOCK
1. AUTHORIZED CAPITALIZATION.
(a) The total number of shares of capital stock authorized to
be issued by this Corporation shall be:
25,000,000 shares of common stock, par value $0.01 per share
(the "Common Stock"); and
10,000,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock").
<PAGE> 2
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 2
(b) The designation, relative rights, preferences and
liabilities of each class of stock, itemized by class, shall be as follows:
(i) Preferred. Shares of the Preferred Stock may be
issued from time to time in one or more series. The board of
directors of this Corporation (hereafter the "Board of Directors" or
"Board") by resolution shall establish each series of Preferred Stock
and fix and determine the number of shares and the designations,
preferences, limitations and relative rights of each such series,
provided that all shares of the Preferred Stock shall be identical
except as to the following relative rights and preferences, as to
which there may be variations fixed and determined by the Board of
Directors between different series:
(A) The rate or manner of payment of
dividends.
(B) Whether shares may be redeemed and, if
so, the redemption price and the terms and conditions of
redemption.
(C) The amount payable upon shares in the
event of voluntary and involuntary liquidation.
(D) Sinking fund provisions, if any, for the
redemption or purchase of shares.
(E) The terms and conditions, if any, on
which the shares may be converted.
(F) Voting rights, if any.
(G) Any other rights or preferences now or
hereafter permitted by the laws of the State of Florida as
variations between different series of preferred stock.
(ii) Common. Each share of Common Stock shall be
entitled to one vote on all matters submitted to a vote of
stockholders, except matters required to be voted on exclusively by
holders of Preferred Stock or of any series of Preferred Stock. The
holders of Common Stock shall be entitled to such dividends as may be
declared by the Board of Directors from time to time, provided that
required dividends, if any, on the Preferred Stock have been paid or
provided for. In the event of the liquidation, dissolution, or
winding up, whether voluntary or involuntary, of this Corporation, the
assets and funds of this Corporation available for distribution to
stockholders, and remaining after the payment to holders of Preferred
Stock of the amounts to which they are entitled, shall be divided and
paid to the holders of the Common Stock according to their respective
shares.
2. NO PREEMPTIVE RIGHTS.
(a) Preferred Stock. Unless otherwise specifically provided
in the terms of the Preferred Stock, the holders of any class of Preferred
Stock of this Corporation shall have no
<PAGE> 3
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 3
preemptive right to subscribe for and purchase their proportionate share of any
additional Preferred Stock (of the same class or otherwise) or Common Stock
issued by this Corporation, from and after the issuance of the shares
originally subscribed for by the stockholders of this Corporation, whether such
additional shares be issued for cash, property, services or any other
consideration and whether or not such shares be presently authorized or be
authorized by subsequent amendment to these Articles of Incorporation.
(b) Common Stock. The holders of Common Stock of this
Corporation shall have no preemptive right to subscribe for and purchase their
proportionate share of any additional Preferred Stock or Common Stock issued by
this Corporation, from and after the issuance of the shares originally
subscribed for by the stockholders of this Corporation, whether such additional
shares be issued for cash, property, services or any other consideration and
whether or not such shares be presently authorized or be authorized by
subsequent amendment to these Articles of Incorporation.
3. PAYMENT FOR STOCK. The consideration for the issuance of shares
of capital stock may be paid, in whole or in part, in cash, in
promissory notes, in other property (tangible or intangible), in
labor or services actually performed for this Corporation, in
promises to perform services in the future evidenced by a written
contract, or in other benefits to this Corporation at a fair
valuation to be fixed by the Board of Directors. When issued, all
shares of stock shall be fully paid and nonassessable.
4. TREASURY STOCK. The Board of Directors of this Corporation shall
have the authority to acquire by purchase and hold from time to
time any shares of its issued and outstanding capital stock for
such consideration and upon such terms and conditions as the Board
of Directors in its discretion shall deem proper and reasonable in
the interest of this Corporation.
ARTICLE V
DIRECTORS
1. NUMBER. The Board of Directors of this Corporation shall consist
of not less than three (3) nor more than nine (9) members, the
exact numbers of directors to be fixed from time to time as
provided in the bylaws of this Corporation.
2. CLASSIFICATION. The Board of Directors shall be divided into
three classes, Class I, Class II and Class III, as nearly equal in
number as possible. As soon as reasonably practicable after the
effectiveness of this provision, directors of the first class
(Class I) shall be elected to hold office for a term expiring at
the 1997 annual meeting of stockholders; directors of the second
class (Class II) shall be elected to hold office for a term
expiring at the 1998 annual meeting of stockholders; and directors
of the third class (Class III) shall be elected to hold office for
a term expiring at the 1999 annual meeting of stockholders.
Subject to adjustment as contemplated by the following paragraph, at
each annual meeting of stockholders after 1996, the successors to
the class of directors whose terms then shall expire shall be
identified as being the same class as the directors they succeed and
elected to hold office for a term expiring at the third succeeding
annual meeting of stockholders.
<PAGE> 4
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 4
If the number of directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional directors of any
class elected by stockholders to fill a vacancy shall hold office for a term
that shall coincide with the remaining term of that class, but in no case will
a decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting for the year
in which his or her term expires and until his or her successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
Notwithstanding the foregoing, if and whenever the holders of any one
or more classes or series of Preferred Stock issued by this Corporation shall
have the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of these Articles of Incorporation or the resolution or
resolutions adopted by the Board of Directors pursuant to Article IV hereof,
and such directors so elected shall not be divided into classes pursuant to
this Article V unless expressly provided by such terms.
3. POWERS. The business and affairs of this Corporation shall be
managed by the Board of Directors, which may exercise all such
powers of this Corporation and do all such lawful acts and things
as are not by law directed or required to be exercised or done by
the stockholders.
4. QUORUM. A quorum for the transaction of business at all meetings
of the Board of Directors shall be a majority of the number of
directors determined from time to time to comprise the Board of
Directors, and the act of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the
directors.
5. REMOVAL. Subject to the rights, if any, of the holders of shares
of Preferred Stock then outstanding, any or all of the directors of
this Corporation may be removed from office at any annual or
special meeting of stockholders by the affirmative vote of at least
a majority of the then outstanding shares of Common Stock of this
Corporation. Notice of any such annual or special meeting of
stockholders shall state that the removal of a director or
directors is among the purposes of the meeting and shall state the
grounds therefor. Directors may not be removed by the stockholders
without cause.
6. VACANCIES. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors, though less than a quorum of
the Board of Directors. Any director elected in accordance with
the preceding sentence shall hold office until the next
stockholders' meeting at which directors are elected (or, if
permitted under applicable law, until the expiration of the
remainder of the full term of the class of directors in which the
new directorship was created or the vacancy occurred)and until such
director's successor is duly elected and qualifies, unless such
director sooner dies, resigns or is removed by the stockholders at
any annual or special meeting. A director elected by stockholders
to fill a vacancy shall be elected for the unexpired term of such
director's predecessor in office.
<PAGE> 5
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 5
7. NOMINATIONS AND ELECTIONS. Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding, only persons
who are nominated in accordance with the following procedures shall
be eligible for election as directors at meetings of stockholders.
Nominations of persons for election to the Board of Directors of this
Corporation may be made at a meeting of stockholders by or at the direction of:
(a) the Board of Directors; (b) by any nominating committee or person appointed
by the Board; (c) or by any stockholder of this Corporation entitled to vote
for the election of directors at the meeting who complies with the notice
procedures set forth in this Article V, Section 7.
Nominations by stockholders shall be made pursuant to timely notice in
writing to the Secretary of this Corporation. To be timely, a stockholder's
notice must be delivered to, or mailed and received at, the principal executive
offices of this Corporation not less than 60 days prior to the date of the
meeting at which the director(s) are to be elected, regardless of any
postponements, deferrals or adjournments of that meeting to a later date;
provided, however, that if less than 70 days' notice or prior public disclosure
of the date of the scheduled meeting is given or made, notice by the
stockholder, to be timely, must be so delivered or received not later than the
close of business on the tenth day following the earlier of the day on which
notice was given or such public disclosure was made.
A stockholder's notice to the Secretary shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or reelection as
a director, (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii) the
class and number of shares of capital stock of this Corporation which are
beneficially owned by the person and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Schedule 14A under the Securities Exchange
Act of 1934, as amended; and (b) as to the stockholder giving the notice (i)
the name and address, as they appear on this Corporation's books, of the
stockholder and (ii) the class and number of shares of this Corporation's stock
which are beneficially owned by the stockholder on the date of such stockholder
notice. This Corporation may require any proposed nominee to furnish such
other information as may reasonably be required by this Corporation to
determine the eligibility of such proposed nominee to serve as a director of
this Corporation.
The presiding officer of the meeting shall determine and declare at
the meeting whether the nomination was made in accordance with the terms of
this Article V, Section 7. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Article V, Section
7, he or she shall so declare at the meeting and any such defective nomination
shall be disregarded.
<PAGE> 6
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 6
ARTICLE VI
STOCKHOLDER MEETINGS
1. ANNUAL MEETINGS. At an annual meeting of stockholders, only such
business shall be conducted, and only such proposals shall be acted upon, as
shall have been brought before the annual meeting (a) by, or at the direction
of, the Board of Directors, or (b) by any stockholder of this Corporation who
complies with the notice procedures set forth in this Article VI, Section 1 and
the requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
For a proposal to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of this Corporation. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive
offices of this Corporation not less than 60 days prior to the scheduled annual
meeting, regardless of any postponements, deferrals or adjournments of that
meeting to a later date; provided, however, that if less than 70 days' notice
or prior public disclosure of the date of the scheduled annual meeting is given
or made, notice by the stockholder, to be timely, must be so delivered or
received not later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the scheduled annual
meeting was given or the day on which such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting, in addition
to any other information as may be required by law, (a) a brief description of
the proposal desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address,
as they appear on this Corporation's books, of the stockholder proposing such
business and any other stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of this Corporation's stock
which are beneficially owned by the stockholder on the date of such stockholder
notice and by any other stockholders known by such stockholder to be supporting
such proposal on the date of such stockholder notice, and (d) any financial
interest of the stockholder in such proposal.
The presiding officer of the annual meeting shall determine and
declare at the annual meeting whether the stockholder proposal was made in
accordance with the terms of this Article VI, Section 1. If the presiding
officer determines that a stockholder proposal was not made in accordance with
the terms of this Article VI, Section 1, he or she shall so declare at the
annual meeting and any such proposal shall not be acted upon at the annual
meeting.
This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the Board of Directors, but, in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed
and received as herein provided.
<PAGE> 7
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 7
2. SPECIAL MEETINGS. Special meetings of the stockholders of this
Corporation for any purpose or purposes may be called at any time by (a) the
Board of Directors; (b) the Chairman of the Board of Directors (if one is so
appointed); (c) the President of this Corporation; or (d) by holders of not less
than 33-1/3% of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting, if such stockholders sign, date and
deliver to this Corporation's secretary one or more written demands for the
meeting describing the purpose or purposes for which it is to be held. Special
meetings of the stockholders of this Corporation may not be called by any other
person or persons.
At any special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been set
forth in the notice of such special meeting.
3. WRITTEN CONSENTS. Any action required or permitted to be taken at
any annual or special meeting of stockholders of this Corporation may be taken
only upon the vote of such stockholders at an annual or special meeting duly
called in accordance with the terms of this Article VI, Section 1 and 2, and may
not be taken by written consent of such stockholders.
ARTICLE VII
AMENDMENTS
This Corporation reserves the right to amend, alter, change or repeal
any provisions contained in these Articles of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are subject to this reservation. Notwithstanding anything
contained in these Articles of Incorporation to the contrary, the affirmative
vote of at least 66-2/3% of the outstanding shares of Common Stock of this
Corporation shall be required to amend or repeal this Article VII, Article V or
Article VI of these Articles of Incorporation or to adopt any provision
inconsistent therewith.
ARTICLE VIII
BYLAWS
1. ADOPTION, AMENDMENT, ETC. The power to adopt the bylaws of this
Corporation, to alter, amend or repeal the bylaws, or to adopt new bylaws, shall
be vested in the Board of Directors of this Corporation; provided, however, that
any bylaw or amendment thereto as adopted by the Board of Directors may be
altered, amended, or repealed in accordance with the bylaws of this Corporation
by vote of the stockholders entitled to vote thereon, or a new bylaw in lieu
thereof may be adopted by the stockholders, and the stockholders may prescribe
in any bylaw made by them that such bylaw shall not be altered, amended or
repealed by the Board of Directors.
2. SCOPE. The bylaws of this Corporation shall be for the government
of this Corporation and may contain any provisions or requirements for the
management or conduct of the affairs and
<PAGE> 8
ECHELON INTERNATIONAL CORPORATION
ARTICLES OF INCORPORATION PAGE 8
business of this Corporation, provided the same are not inconsistent with the
provisions of these Articles of Incorporation, or contrary to the laws of the
State of Florida or of the United States.
IN WITNESS WHEREOF, ECHELON INTERNATIONAL CORPORATION has caused these
Amended and Restated Articles of Incorporation to be executed and acknowledged
by its President and Secretary this _________ day of October, 1996.
ATTEST: ECHELON INTERNATIONAL
CORPORATION
(CORPORATE SEAL)
By:
- -------------------------------------- --------------------------
, Secretary ,President
<PAGE> 9
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
ECHELON INTERNATIONAL CORPORATION
ECHELON INTERNATIONAL CORPORATION, a corporation organized and
existing under the laws of State of Florida (this "Corporation"), in order to
amend its Articles of Incorporation, in accordance with the requirements of
Chapter 607, Florida Statutes, does hereby certify as follows:
1. The name of this Corporation is Echelon International
Corporation.
2. The amendment effected hereby was duly adopted by the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") on November 4, 1996, and shall become effective upon filing hereof
with the Florida Department of State. Shareholder approval was not required.
3. The amendment effected hereby was duly adopted by the Board of
Directors pursuant to the authority granted to and vested in the Board in
accordance with the provisions of the Company's Articles of Incorporation, as
amended to date (hereinafter called the "Articles of Incorporation"), the Board
of Directors has authorized and does hereby creates a series of Preferred
Stock, par value $.01 per share, of the Company and hereby states the
designation and number of shares, and fixes the relative rights, powers and
preferences thereof, and the limitations thereof, as more particularly set
forth below.
4. The Articles of Incorporation are hereby amended by adding to
the end of Section 1(b) of Article IV after the end of Section 1(b)(ii), a new
Section 1(b)(iii) as follows:
* * *
(iii) Series A Junior Participating Preferred Stock.
Of the 10,000,000 shares of Preferred Stock authorized by these
Articles of Incorporation, a series of 250,000 of such shares shall be
and are authorized and designated as follows:
(a) Designation and Amount. The shares of
such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A
Preferred Stock shall be 250,000. Such number of shares may
be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number
of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities issued by the Company convertible into
Series A Preferred Stock.
<PAGE> 10
(b) Dividends and Distributions.
(1) Subject to the rights of the
holders of any shares of any series of Preferred Stock of the
Company (the "Preferred Stock") (or any similar stock) ranking
prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share, of the Company (the "Common Stock")
and of any other stock of the Company ranking junior to the
Series A Preferred Stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable
in cash on the last day of January, April, July, and October
in each year (each such date being referred to herein as a
"Dividend Payment Date"), commencing on the first Dividend
Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1
or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of
Common Stock, declared on the Common Stock since the
immediately preceding Dividend Payment Date or, with respect
to the first Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred
Stock. In the event the Company shall at any time after
November 15, 1996 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Company shall declare a
dividend or distribution on the Series A Preferred Stock as
provided in Section 2(a) immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Dividend
Payment Date and the next subsequent Dividend Payment Date, a
dividend of $1 per share on the Series A Preferred Stock shall
nevertheless be payable, when, as and if declared, on such
subsequent Dividend Payment Date.
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<PAGE> 11
(3) Dividends shall begin to accrue
and be cumulative, whether or not earned or declared, on
outstanding shares of Series A Preferred Stock from the
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to
the Record Date for the first Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a
Dividend Payment Date or is a date after the Record Date for
the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of
Directors may fix a Record Date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which Record Date shall be not more than 60 days
prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting
rights;
(1) Subject to the provision for
adjustment hereinafter set forth and except as otherwise
provided in the Articles of Incorporation or required by law,
each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters upon which the
holders of the Common Stock of the Company are entitled to
vote. In the event the Company shall at any time after
November 15, 1996 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(2) Except as otherwise provided in
the Articles of Incorporation, as hereby or otherwise
hereafter amended, and except as otherwise required by law,
the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock
of the Company having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Company.
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<PAGE> 12
(3) Except as set forth herein, or as
otherwise provided by law, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for
taking any corporate action.
(d) Certain Restrictions.
(1) Whenever quarterly dividends or
other dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not earned or declared, on shares of
Series A Preferred Stock outstanding shall have been paid in
full, the Company shall not:
a. declare or pay dividends, or
make any other distributions, on any shares of stock ranking
junior (as to dividends) to the Series A Preferred Stock;
b. declare or pay dividends, or
make any other distributions, on any shares of stock ranking
on a parity (as to dividends) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
c. redeem or purchase or
otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock,
provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange
for shares of any stock of the Company ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to
the Series A Preferred Stock or rights, warrants or options to
acquire such junior stock;
d. redeem or purchase or
otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
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<PAGE> 13
(2) The Company shall not permit any
Subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company unless the
Company could, under Section 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
(e) Reacquired Shares. Any shares of Series
A Preferred Stock purchased or otherwise acquired by the
Company in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but
unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Company, no distribution shall be made (A) to the holders of
the Common Stock or of shares of any other stock of the
Company ranking junior, upon liquidation, dissolution or
winding up, to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not earned or declared, to the date of such
payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate
amount to be distributed per share to holders of shares of
Common Stock, or (B) to the holders of shares of stock ranking
on a parity upon liquidation, dissolution or winding up with
the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event, however, that there
are not sufficient assets available to permit payment in full
of the Series A liquidation preference and the liquidation
preferences of all other classes and series of stock of the
Company, if any, that rank on a parity with the Series A
Preferred Stock in respect thereof, then the assets available
for such distribution shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of
such parity shares in the proportion to their respective
liquidation preferences. In the event the Company shall at
any time after November 15, 1996 declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(A) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number
of shares
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<PAGE> 14
of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(g) Consolidation, Merger, etc. In case the
Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are converted into, exchanged for or changed into other
stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at
the same time be similarly converted into, exchanged for or
changed into an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted, exchanged
or converted. In the event the Company shall at any time
after November 15, 1996 declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence
with respect to the conversion, exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
(h) No Redemption. The shares of Series A
Preferred Stock shall not be redeemable from any holder.
(i) Rank. The Series A Preferred Stock
shall rank, with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or
winding up of the Company, junior to all other series of
Preferred Stock and senior to the Common Stock.
(j) Amendment. If any proposed amendment to
the Articles of Incorporation (including as amended by these
Articles of Amendment) would alter, change or repeal any of
the preferences, powers or special rights given to the Series
A Preferred Stock so as to affect the Series A Preferred Stock
adversely, then the holders of the Series A Preferred Stock
shall be entitled to vote separately as a class upon such
amendment, and the affirmative vote of two-thirds of the
outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption
thereof, in addition to such other vote as may be required by
the laws of the State of Florida.
6
<PAGE> 15
(k) Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share that shall entitle
the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
* * *
IN WITNESS WHEREOF, the President of this Corporation has executed
these Articles of Amendment of the Articles of Incorporation of Echelon
International Corporation this 14th day of November, 1996.
ECHELON INTERNATIONAL
CORPORATION
By: /s/ Darryl A. LeClair, President
----------------------------------
7
<PAGE> 1
EXHIBIT 4.2
BYLAWS
OF
ECHELON INTERNATIONAL CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of ECHELON
INTERNATIONAL CORPORATION (this "Corporation") shall be at such place within or
without the State of Florida as the Board of Directors of this Corporation (the
"Board of Directors" or the "Board") or the officers of this Corporation acting
within their authority shall from time to time determine.
Section 2. Other Offices. This Corporation may also have
offices at such other places both within and without the State of Florida as
the Board of Directors or the officers of this Corporation acting within their
authority may from time to time determine or the business of this Corporation
may require.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of the
stockholders shall be held between January 1 and December 31, inclusive, in
each year for the purpose of electing directors and for the transaction of such
other proper business as may come before the meeting, the exact date to be
established by the Board of Directors from time to time.
Section 2. Special Meetings. Special meetings of the
stockholders may be called, for any purpose or purposes, by the Board of
Directors, the Chairman of the Board (if one is so appointed) or the President
and shall be called by the President or the Secretary if the holders of not
less than 33-1/3% percent of all the votes entitled to be cast on any issue
proposed to be considered at such special meeting sign, date and deliver to
this Corporation's Secretary one or more written demands for a special meeting,
describing the purpose(s) for which it is to be held. Special meetings of the
stockholders of this Corporation may not be called by any other person or
persons. Notice and call of any such special meeting shall state the purpose
or purposes of the proposed meeting, and business transacted at any special
meeting of the stockholders shall be limited to the purposes stated in the
notice thereof.
Section 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Florida, as the
place of meeting for any annual or special meeting of
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<PAGE> 2
the stockholders. If no designation is made, the place of meeting shall be the
principal executive office of this Corporation.
Section 4. Notice of Meeting. Written notice stating the place,
day and hour of an annual or special meeting and the purpose or purposes for
which it is called shall be given no fewer than ten (10) nor more than sixty
(60) days before the date of the meeting to each stockholder entitled to vote
at such meeting, except that no notice of a meeting need be given to any
stockholder for which notice is not required to be given under law. Notice may
be delivered personally, via United States mail, telegraph, teletype, facsimile
or other electronic transmission, or by private mail carriers handling
nationwide mail services, by or at the direction of the President, the
Secretary, the Board of Directors, or the person(s) calling the meeting. If
mailed via United States mail, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the stockholder at the
stockholder's address as it appears on the stock transfer books of this
Corporation, with postage thereon prepaid. If the notice is mailed at least 30
days before the date of the meeting, the mailing may be done by a class of
United States mail other than first class.
Section 5. Notice of Adjourned Meeting. If an annual or special
stockholders' meeting is adjourned to a different date, time, or place, notice
need not be given of the new date, time or place if the new date, time or place
is announced at the meeting before an adjournment is taken, and any business
may be transacted at the adjourned meeting that might have been transacted on
the original date of the meeting. If, however, a new record date for the
adjourned meeting is or must be fixed under law, notice of the adjourned
meeting must be given to persons who are stockholders as of the new record date
and who are otherwise entitled to notice of such meeting.
Section 6. Waiver of Call and Notice of Meeting. Call and
notice of any stockholders' meeting may be waived by any stockholder before or
after the date and time stated in the notice. Such waiver must be in writing
signed by the stockholder and delivered to this Corporation. Neither the
business to be transacted at nor the purpose of any special or annual meeting
need be specified in such waiver. A stockholder's attendance at a meeting (a)
waives such stockholder's ability to object to lack of notice or defective
notice of the meeting, unless the stockholder at the beginning of the meeting
objects to holding the meeting or transacting business at the meeting; and (b)
waives such stockholder's ability to object to consideration of a particular
matter at the meeting that is not within the purpose or purposes described in
the meeting notice, unless the stockholder objects to considering the matter
when it is presented.
Section 7. Quorum. Except as otherwise provided in these Bylaws
or in the Articles of Incorporation of this Corporation, as amended from time
to time (the "Articles of Incorporation"), a majority of the outstanding shares
of this Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at any meeting of the stockholders. Once a share is
represented for any purpose at a meeting, it is deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting, unless a new record date is or must be set for that adjourned meeting,
and the withdrawal of stockholders after a quorum has been established at a
meeting shall not effect the validity of any action taken at the meeting or any
adjournment thereof.
Section 8. Adjournment: Quorum for Adjourned Meeting. If less
than a majority of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn
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<PAGE> 3
the meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented or deemed to be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.
Section 9. Voting on Matters Other Than Election of Directors.
At any meeting at which a quorum is present, action on any matter other than
the election of directors shall be approved if the votes cast by the holders of
shares represented at the meeting and entitled to vote on the subject matter
favoring the action exceed the votes cast opposing the action, unless a greater
number of affirmative votes or voting by classes is required by law, the
Articles of Incorporation or these Bylaws.
Section 10. Voting for Directors. Directors shall be elected by
a plurality of the votes cast by the shares entitled to vote at a meeting at
which a quorum is present.
Section 11. Voting Lists. At least ten (10) days prior to each
meeting of stockholders, the officer or agent having charge of the stock
transfer books for shares of this Corporation shall make a complete list of the
stockholders entitled to vote at such meeting, or any adjournment thereof, with
the address and the number, class and series (if any) of shares held by each,
which list shall be subject to inspection by any stockholder during normal
business hours for at least ten (10) days prior to the meeting. The list also
shall be available at the meeting and shall be subject to inspection by any
stockholder at any time during the meeting or its adjournment. The
stockholders list shall be prima facie evidence as to who are the stockholders
entitled to examine such list or the transfer books and to vote at any meeting
of the stockholders.
Section 12. Voting of Shares. Except as otherwise provided by
law or in the Articles of Incorporation, each stockholder entitled to vote
shall be entitled at every meeting of the stockholders to one vote in person or
by proxy on each matter for each share of voting stock held by such
stockholder. Such right to vote shall be subject to the right of the Board of
Directors to close the transfer books or to fix a record date for voting
stockholders as hereinafter provided. Treasury shares, and shares of stock of
this Corporation owned directly or indirectly by another corporation the
majority of the voting stock of which is owned or controlled by this
Corporation, shall not be voted at any meeting and shall not be counted in
determining the total number of outstanding shares.
Section 13. Proxies. At all meetings of stockholders, a
stockholder may vote by proxy, executed in writing and delivered to this
Corporation in the original or transmitted via telegram, or as a photographic,
photostatic or equivalent reproduction of a written proxy by the stockholder or
by the stockholder's duly authorized attorney-in-fact; but, no proxy shall be
valid after eleven (11) months from its date, unless the proxy provides for a
longer period. Each proxy shall be filed with the Secretary of this
Corporation before or at the time of the meeting. In the event that a proxy
shall designate two or more persons to act as proxies, a majority of such
persons present at the meeting, or, if only one is present, that one, shall
have all of the powers conferred by the proxy upon all the persons so
designated, unless the instrument shall provide otherwise.
Section 14. Inspectors. For each meeting of the stockholders,
the Board of Directors or the President may appoint one or more inspectors to
supervise the voting; and, if one or more inspectors are so appointed, all
questions respecting the qualification of any vote, the validity of any
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<PAGE> 4
proxy, and the acceptance or rejection of any vote shall be decided by such
inspector(s). Before acting at any meeting, the inspector(s) shall take an
oath to execute their duties with strict impartiality and according to the best
of their ability. If any inspector shall fail to be present or shall decline
to act, the President shall appoint another inspector to act in his or her
place. In case of a tie vote by the inspectors on any question, the presiding
officer shall decide the issue.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of this
Corporation shall be managed by its Board of Directors, which may exercise all
such powers of this Corporation and do all such lawful acts and things as are
not by law, the Articles of Incorporation or these Bylaws directed or required
to be exercised or done only by the stockholders.
Section 2. Number, Tenure and Qualifications. The number of
directors of the Corporation shall be not less than three (3) nor more than
nine (9), the number of the same to be fixed by resolution adopted by a vote of
a majority of the then authorized number of directors; provided that no
decrease in the number of directors shall have the effect of shortening the
term of any then incumbent director. Each director shall hold office until
his or her term of office expires and until such director's successor is duly
elected and qualifies, unless such director sooner dies, resigns or is removed
by the stockholders at any annual or special meeting. It shall not be
necessary for directors to be stockholders. All directors shall be natural
persons who are 18 years of age or older.
Section 3. Annual Meeting. The Board of Directors shall hold an
annual meeting for the purpose of the election of officers and the transaction
of such other business as may come before the meeting. If no other date, place
and/or time is set by the Board for such meeting, the same shall be held at the
same place as and immediately following the annual meeting of stockholders;
and, if a majority of the directors are present at such place and time, no
prior notice of such meeting shall be required to be given to the directors.
Section 4. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice from time to time on such date(s), at such
time(s) and at such place(s) as shall have been determined in advance in
accordance with a schedule, resolution or other action duly adopted or taken by
the Board of Directors.
Section 5. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, if there be one, or the
President. The person or persons authorized to call special meetings of the
Board of Directors may fix the place for holding any special meetings of the
Board of Directors called by such person or persons, as the case may be. If no
such designation is made, the place of meeting shall be the principal executive
office of this Corporation. Notice of any special meeting of the Board shall
be given, unless waived, in accordance with Section 6 of this Article.
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Section 6. Notice. Whenever notice of a meeting is required,
written notice stating the place, day and hour of the meeting shall be
delivered at least two (2) days prior thereto to each director, either
personally, or by United States mail, telegraph, teletype, facsimile or other
form of electronic communication, or by private mail carriers handling
nationwide mail services, to the director's business address. If notice is
given by United States mail, such notice shall be deemed to be delivered five
(5) days after deposited in the United States mail so addressed with postage
thereon prepaid or when received, if such date is earlier. If notice is given
by telegraph, teletype, facsimile transmission or other form of electronic
communication or by private mail carriers handling nationwide mail services,
such notice shall be deemed to be delivered when received by the director. Any
director may waive notice of any meeting, either before, at or after such
meeting. The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened and so states at the beginning of
the meeting or promptly upon arrival at the meeting.
Section 7. Quorum. A majority of the total number of directors
as determined from time to time to comprise the Board of Directors shall
constitute a quorum.
Section 8. Adjournment: Quorum for Adjourned Meeting. If less
than a majority of the total number of directors are present at a meeting, a
majority of the directors so present may adjourn the meeting from time to time
without further notice. At any adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting as originally noticed.
Section 9. Manner of Acting. If a quorum is present when a vote
is taken, the act of a majority of the directors present at the meeting shall
be the act of the Board of Directors unless otherwise provided in the Articles
of Incorporation.
Section 10. Removal. Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding, any or all of the
directors of this Corporation may be removed from office at any annual or
special meeting of stockholders by the affirmative vote of at least a majority
of the then outstanding shares of Common Stock of this Corporation. Notice of
any such annual or special meeting of stockholders shall state that the removal
of a director or directors is among the purposes of the meeting and shall state
the grounds therefor. Directors may not be removed by the stockholders without
cause.
Section 11. Vacancies. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase in the number
of directors, may be filled by the affirmative vote of a majority of the
remaining directors, though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence shall hold office
until the next stockholders' meeting at which directors are elected (or, if
permitted under applicable law, until the expiration of the remainder of the
full term of the class of directors in which the new directorship was created
or the vacancy occurred)and until such director's successor is duly elected and
qualifies, unless such director sooner dies, resigns or is removed by the
stockholders at any annual or special meeting. A director elected by
stockholders to fill a vacancy shall be elected for the unexpired term of such
director's predecessor in office.
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Section 12. Compensation. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors, and may be paid compensation for
attendance at each meeting of the Board of Directors or for serving as
directors. No payment shall preclude any director from serving this
Corporation in any other capacity and receiving compensation therefor.
Section 13. Presumption of Assent. A director of this
Corporation who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless such director objects at the beginning of the meeting
(or promptly upon his or her arrival) to the holding of the meeting or the
transacting of specified business at the meeting or such director votes against
such action or abstains from voting in respect of such matter.
Section 14. Informal Action by Board. Any action required or
permitted to be taken by any provisions of law, the Articles of Incorporation
or these Bylaws at any meeting of the Board of Directors or of any committee
thereof may be taken without a meeting if each and every member of the Board or
of such committee, as the case may be, signs a written consent thereto and such
written consent is filed in the minutes of the proceedings of the Board or such
committee, as the case may be. Action taken under this section is effective
when the last director signs the consent, unless the consent specifies a
different effective date, in which case it is effective on the date so
specified.
Section 15. Meeting by Telephone, Etc. Directors or the members
of any committee thereof shall be deemed present at a meeting of the Board of
Directors or of any such committee, as the case may be, if the meeting is
conducted using a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of this Corporation shall
consist of a Chief Executive Officer, a President, a Secretary and a Treasurer,
each of whom shall be appointed by the Board of Directors. The Board of
Directors may also appoint a Chairman of the Board, who may be an officer of
this Corporation if the Board so determines, one or more Vice Presidents, one
or more Assistant Secretaries and Assistant Treasurers and such other officers
as the Board of Directors shall deem appropriate. The same individual may
simultaneously hold more than one office in this Corporation.
Section 2. Appointment and Term of Office. The officers of this
Corporation shall be appointed annually by the Board of Directors at its annual
meeting. If the appointment of officers shall not be made at such meeting,
such appointment shall be made as soon thereafter as is convenient. Each
officer shall hold office until such officer's successor is duly appointed and
qualifies, unless such officer sooner dies, resigns or is removed by the Board.
The appointment of an officer does not itself create contract rights.
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Section 3. Resignation. An officer may resign at any time by
delivering notice to this Corporation. A resignation shall be effective when
the notice is delivered unless the notice specifies a later effective date. An
officer's resignation shall not affect this Corporation's contract rights, if
any, with the officer.
Section 4. Removal. The Board of Directors may remove any
officer at any time with or without cause. An officer's removal shall not
affect the officer's contract rights, if any, with this Corporation.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise may be filled by the Board
of Directors for the unexpired portion of the term.
Section 6. Duties of Officers. The Chairman of the Board of
this Corporation, or the President if there shall not be a Chairman of the
Board, shall preside at all meetings of the Board of Directors and of the
stockholders. The Chief Executive Officer shall be the chief executive officer
of this Corporation. The Secretary shall be responsible for preparing minutes
of the directors' and stockholders' meetings and for authenticating records of
this Corporation. Subject to the foregoing, the officers of this Corporation
shall have such powers and duties as ordinarily pertain to their respective
offices and such additional powers and duties specifically conferred by law,
the Articles of Incorporation and these Bylaws, or as may be assigned to them
from time to time by the Board of Directors or an officer authorized by the
Board of Directors to prescribe the duties of other officers.
Section 7. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, by any duly appointed
committee thereof, or otherwise as approved by the Board, and no officer shall
be prevented from receiving a salary or other compensation by reason of the
fact that the officer is also a director of this Corporation.
Section 8. Delegation of Duties. In the absence or disability
of any officer of this Corporation, or for any other reason deemed sufficient
by the Board of Directors, the Board may delegate the powers or duties of such
officer to any other officer or to any other director for the time being.
Section 9. Disaster Emergency Powers of Acting Officers. Unless
otherwise expressly prescribed by action of the Board of Directors taken
pursuant to Article XV of these Bylaws, if, as a result of some catastrophic
event, a quorum of this Corporation's directors cannot readily be assembled and
the Chief Executive Officer is unable to perform the duties of the office of
Chief Executive Officer and/or other officers are unable to perform their
duties, (a) the powers and duties of Chief Executive Officer shall be held and
performed by that officer of this Corporation highest on the list of successors
(adopted by the Board of Directors for such purpose) who shall be available and
capable of holding and performing such powers and duties; and, absent any such
prior designation, by the President; or, if the President is not available and
capable of holding and performing such powers and duties, then by that Vice
President who shall be available and capable of holding and performing such
powers and duties whose surname commences with the earliest letter of the
alphabet among all such Vice Presidents; or, if no Vice President is available
and capable of holding and performing such powers and duties, then by the
Secretary; or, if the Secretary is likewise unavailable,
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by the Treasurer; (b) the officer so selected to hold and perform such powers
and duties shall serve as Acting Chief Executive Officer until the Chief
Executive Officer again becomes capable of holding and performing the powers
and duties of Chief Executive Officer, or until the Board of Directors shall
have elected a new Chief Executive Officer or designated another individual as
Acting Chief Executive Officer; (c) such officer (or the Chief Executive
Officer, if such person is still serving) shall have the power, in addition to
all other powers granted to the Chief Executive Officer by law, the Articles of
Incorporation, these Bylaws and the Board of Directors, to appoint acting
officers to fill vacancies that may have occurred, either permanently or
temporarily, by reason of such disaster or emergency, each of such acting
appointees to serve in such capacity until the officer for whom the acting
appointee is acting is capable of performing the duties of such office, or
until the Board of Directors shall have designated another individual to
perform such duties or shall have elected or appointed another person to fill
such office; (d) each acting officer so appointed shall be entitled to exercise
all powers invested by law, the Articles of Incorporation, these Bylaws and the
Board of Directors in the office in which such person is serving; and (e)
anyone transacting business with this Corporation may rely upon a certificate
signed by any two officers of this Corporation that a specified individual has
succeeded to the powers and duties of the Chief Executive Officer or such other
specified office. Any person, firm, corporation or other entity to which such
certificate has been delivered by such officers may continue to rely upon it
until notified of a change by means of a writing signed by two officers of this
corporation.
ARTICLE V
EXECUTIVE AND OTHER COMMITTEES
Section 1. Creation of Committees. The Board of Directors may
designate an Executive Committee and one or more other committees, each to
consist of two (2) or more of the directors of this Corporation.
Section 2. Executive Committee. The Executive Committee, if
there shall be one, shall consult with and advise the officers of this
Corporation in the management of its business, and shall have, and may
exercise, except to the extent otherwise provided in the resolution of the
Board of Directors creating such Executive Committee, such powers of the Board
of Directors as can be lawfully delegated by the Board.
Section 3. Other Committees. Such other committees, to the
extent provided in the resolution or resolutions creating them, shall have such
functions and may exercise such powers of the Board of Directors as can be
lawfully delegated.
Section 4. Removal or Dissolution. Any Committee of the Board
of Directors may be dissolved by the Board at any meeting; and any member of
such committee may be removed by the Board of Directors with or without cause.
Such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 5. Vacancies on Committees. Vacancies on any committee
of the Board of Directors shall be filled by the Board of Directors at any
regular or special meeting.
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Section 6. Meetings of Committees. Regular meetings of any
committee of the Board of Directors may be held without notice from time to
time on such date(s), at such time(s) and at such place(s) as shall have been
determined in advance in accordance with a schedule, resolution or other action
duly adopted or taken by such committee and special meetings of any such
committee may be called by any member thereof upon two (2) days notice of the
date, time and place of the meeting given to each of the other members of such
committee, or on such shorter notice as may be agreed to in writing by each of
the other members of such committee, given either personally or in the manner
provided in Section 6 of Article III of these Bylaws (pertaining to notice for
directors' meetings).
Section 7. Absence of Committee Members. The Board of Directors
may designate one or more directors as alternate members of any committee of
the Board of Directors, who may replace at any meeting of such committee, any
member not able to attend.
Section 8. Quorum of Committees. At all meetings of committees
of the Board of Directors, a majority of the total number of members of the
committee as determined from time to time shall constitute a quorum for the
transaction of business.
Section 9. Manner of Acting of Committees. If a quorum is
present when a vote is taken, the act of a majority of the members of any
committee of the Board of Directors present at the meeting shall be the act of
such committee.
Section 10. Minutes of Committees. Each committee of the Board
of Directors shall keep regular minutes of its proceedings and report the same
to the Board of Directors when required.
Section 11. Compensation. Members of any committee of the Board
of Directors may be paid compensation in accordance with the provisions of
Section 12 of Article III of these Bylaws (pertaining to compensation of
directors).
Section 12. Informal Action. Any committee of the Board of
Directors may take such informal action and hold such informal meetings as
allowed by the provisions of Sections 14 and 15 of Article III of these Bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. General. To the fullest extent permitted by law,
this Corporation shall be entitled but not obligated to indemnify any person
who is or was a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or other type of proceeding (other than an
action by or in the right of this Corporation), whether civil, criminal,
administrative, investigative or otherwise, and whether formal or informal, by
reason of the fact that such person is or was a director or officer of this
Corporation or is or was serving at the request of this Corporation as a
director, officer, employee, agent, trustee or fiduciary of another
corporation, partnership, joint venture, trust (including, without limitation,
an employee benefit trust) or other enterprise, against
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judgments, amounts paid in settlement, penalties, fines (including an excise
tax assessed with respect to any employee benefit plan) and expenses (including
attorneys' fees, paralegals' fees and court costs) actually and reasonably
incurred in connection with any such action, suit or other proceeding,
including any appeal thereof, if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of this Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any such action, suit or other proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner that such person reasonably believed to
be in, or not opposed to, the best interests of this Corporation or, with
respect to any criminal action or proceeding, had reasonable cause to believe
that such person's conduct was unlawful.
Section 2. Actions by or in the Right of this Corporation. To
the fullest extent permitted by law, whenever indemnification is proper as
determined below, this Corporation shall be obligated to indemnify any person
who is or was a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or other type of proceeding (as further
described in Section 1 of this Article VI) by or in the right of this
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director or officer of this Corporation or is or was serving
at the request of this Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees, paralegals' fees and court costs)
and amounts paid in settlement not exceeding, in the judgment of the Board of
Directors, the estimated expenses of litigating the action, suit or other
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such action, suit or other proceeding, including
any appeal thereof, if such person acted in good faith and in a manner such
person reasonably believed to be in, or not opposed to, the best interests of
this Corporation, except that no indemnification shall be made under this
Section 2 in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such action, suit or other proceeding was brought, or any other
court of competent jurisdiction, shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnification for such
expenses that such court shall deem proper.
Section 3. Obligation to Indemnify. To the extent that a
director or officer has been successful on the merits or otherwise in defense
of any action, suit or other proceeding referred to in Section 1 or Section 2
of this Article VI, or in the defense of any claim, issue or matter therein,
such person shall, upon application, be indemnified against expenses (including
attorneys' fees, paralegals' fees and court costs) actually and reasonably
incurred by such person in connection therewith.
Section 4. Determination that Indemnification is Proper.
Indemnification pursuant to Section 1 or Section 2 of this Article VI, unless
made under the provisions of Section 3 of this Article VI or unless otherwise
made pursuant to a determination by a court, shall be made by this Corporation
only as authorized in the specific case upon a determination that the
indemnification is proper in the circumstances because the indemnified person
has met the applicable standard of conduct set forth in Section 1 or Section 2
of this Article VI. Such determination shall be made either
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(1) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the action, suit or other proceeding to which
the indemnification relates; (2) if such a quorum is not obtainable or, even if
obtainable, by majority vote of a committee duly designated by the Board of
Directors (the designation being one in which directors who are parties may
participate) consisting solely of two or more directors not at the time parties
to such action, suit or other proceeding; (3) by independent legal counsel (i)
selected by the Board of Directors in accordance with the requirements of
subsection (1) or by a committee designated under subsection (2) or (ii) if a
quorum of the directors cannot be obtained and a committee cannot be
designated, selected by majority vote of the full Board of Directors (the vote
being one in which directors who are parties may participate); or (4) by the
stockholders by a majority vote of a quorum consisting of stockholders who were
not parties to such action, suit or other proceeding or, if no such quorum is
obtainable, by a majority vote of stockholders who were not parties to such
action, suit or other proceeding.
Section 5. Evaluation and Authorization. Evaluation of the
reasonableness of expenses and authorization of indemnification shall be made
in the same manner as is prescribed in Section 4 of this Article VI for the
determination that indemnification is permissible; provided, however, that if
the determination as to whether indemnification is permissible is made by
independent legal counsel, the persons who selected such independent legal
counsel shall be responsible for evaluating the reasonableness of expenses and
may authorize indemnification.
Section 6. Prepayment of Expenses. Expenses (including
attorneys' fees, paralegals' fees and court costs) incurred by a director or
officer in defending a civil or criminal action, suit or other proceeding
referred to in Section 1 or Section 2 of this Article VI may, in the discretion
of the Board of Directors, be paid by this Corporation in advance of the final
disposition thereof upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if such person is ultimately found not
to be entitled to indemnification by this Corporation pursuant to this Article
VI.
Section 7. Nonexclusivity and Limitations. The indemnification
and advancement of expenses provided pursuant to this Article VI shall not be
deemed exclusive of any other rights to which a person may be entitled under
any law, Bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in such person's official capacity and as to
action in any other capacity while holding office with this Corporation, and
shall continue as to any person who has ceased to be a director or officer and
shall inure to the benefit of such person's heirs and personal representatives.
The Board of Directors may, at any time, approve indemnification of or
advancement of expenses to any other person that this Corporation has the power
by law to indemnify, including, without limitation, employees and agents of
this Corporation. In all cases not specifically provided for in this Article
VI, indemnification or advancement of expenses shall not be made to the extent
that such indemnification or advancement of expenses is expressly prohibited by
law.
Section 8. Continuation of Indemnification Right. Unless
expressly otherwise provided when authorized or ratified by this corporation,
indemnification and advancement of expenses as provided for in this Article VI
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person. For purposes of this Article VI, the term
"corporation" includes, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a
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consolidation or merger, so that any person who is or was a director or officer
of a constituent corporation, or is or was serving at the request of a
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, is in the
same position under this Article VI with respect to the resulting or surviving
corporation as such person would have been with respect to such constituent
corporation if its separate existence had continued.
Section 9. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of this Corporation, or who is or was serving at the request of this
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity
or arising out of such person's status as such, whether or not this Corporation
would have the power to indemnify such person against the liability under
Section 1 or Section 2 of this Article VI.
ARTICLE VII
INTERESTED PARTIES
Section 1. General. No contract or other transaction between
this Corporation and any one or more of its directors or any other corporation,
firm, association or entity in which one or more of its directors are directors
or officers or are financially interested shall be either void or voidable
because of such relationship or interest, because such director or directors
were present at the meeting of the Board of Directors or of a committee thereof
that authorizes, approves or ratifies such contract or transaction or because
such director's or directors' votes are counted for such purpose if: (a) the
fact of such relationship or interest is disclosed or known to the Board of
Directors or committee that authorizes, approves or ratifies the contract or
transaction by a vote or consent sufficient for the purpose without counting
the votes or consents of such interested directors; (b) the fact of such
relationship or interest is disclosed or known to the stockholders entitled to
vote on the matter, and they authorize, approve or ratify such contract or
transaction by vote or written consent; or (c) the contract or transaction is
fair and reasonable as to this Corporation at the time it is authorized by the
Board of Directors, a committee thereof or the stockholders.
Section 2. Determination of Quorum. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the Board of Directors or a committee thereof that authorizes, approves or
ratifies a contract or transaction referred to in Section 1 of this Article
VII.
Section 3. Approval by Stockholders. For purposes of Section
1(b) of this Article VII, a conflict of interest transaction shall be
authorized, approved or ratified if it receives the vote of a majority of the
shares entitled to be counted under this Section 3. Shares owned by or voted
under the control of a director who has a relationship or interest in the
transaction described in Section 1 of this Article VII may not be counted in a
vote of stockholders to determine whether to authorize, approve or ratify a
conflict of interest transaction under Section 1(b) of this Article VII. The
vote of the shares owned by or voted under the control of a director who has a
relationship or interest in
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the transaction described in Section 1 of this Article VII, shall be counted,
however, in determining whether the transaction is approved under other
sections of this Corporation's Bylaws and law. A majority of those shares that
would be entitled, if present, to be counted in a vote on the transaction under
this Section 3 shall constitute a quorum for the purpose of taking action under
this Section 3.
ARTICLE IX
CERTIFICATES OF STOCK
Section 1. Certificates for Shares. Shares may but need not be
represented by certificates. The rights and obligations of stockholders shall
be identical whether or not their shares are represented by certificates. If
shares are represented by certificates, each certificate shall be in such form
as the Board of Directors may from time to time prescribe, signed (either
manually or in facsimile) by the President or a Vice President (and may be
signed (either manually or in facsimile) by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer and sealed with the seal
of this Corporation or its facsimile), exhibiting the holder's name, certifying
the number of shares owned and stating such other matters as may be required by
law. The certificates shall be numbered and entered on the books of this
Corporation as they are issued. If shares are not represented by certificates,
then, within a reasonable time after issue or transfer of shares without
certificates, this Corporation shall send the stockholder a written statement
in such form as the Board of Directors may from time to time prescribe,
certifying as to the number of shares owned by the stockholder and as to such
other information as would have been required to be on certificates for such
shares.
If and to the extent this Corporation is authorized to issue shares of
more than one class or more than one series of any class, every certificate
representing shares shall set forth or fairly summarize upon the face or back
of the certificate, or shall state that the Corporation will furnish to any
stockholder upon request and without charge a full statement of:
(a) the designations, relative rights, preferences and limitations
of the shares of each class or series authorized to be issued;
(b) the variations in rights, preferences and limitations between
the shares of each such series, if this Corporation is authorized to issue any
preferred or special class in series insofar as the same have been fixed and
determined; and
(c) the authority of the Board of Directors to fix and determine
the variations, relative rights and preferences of future series.
Section 2. Signatures of Past Officers. If the person who
signed (either manually or in facsimile) a share certificate no longer holds
office when the certificate is issued, the certificate shall nevertheless be
valid.
Section 3. Transfer Agents and Registrars. The Board of
Directors may, in its discretion, appoint responsible banks or trust companies
in such city or cities as the Board may deem advisable
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from time to time to act as transfer agents and registrars of the stock of this
Corporation; and, when such appointments shall have been made, no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars.
Section 4. Transfer of Shares. Transfers of shares of this
Corporation shall be made upon its books by the holder of the shares in person
or by the holder's lawfully constituted representative, upon surrender of the
certificate of stock for cancellation if such shares are represented by a
certificate of stock or by delivery to this Corporation of such evidence of
transfer as may be required by this Corporation if such shares are not
represented by certificates. The person in whose name shares stand on the
books of this Corporation shall be deemed by this Corporation to be the owner
thereof for all purposes and this Corporation shall not be bound to recognize
any equitable or other claim to or interest in such share on the part of any
other person, whether or not it shall have express or other notice thereof,
save as expressly provided by the laws of the State of Florida.
Section 5. Lost Certificates. The Board of Directors may direct
a new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by this Corporation and alleged to have been
lost or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost or destroyed certificate or certificates, or the owner's
legal representative, to pay a reasonable charge for issuing the new
certificate, to advertise the matter in such manner as it shall require and/or
to give this Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against this Corporation with respect to the
certificate alleged to have been lost or destroyed.
ARTICLE X
RECORD DATE
Section 1. Record Date for Stockholder Actions. The Board of
Directors is authorized from time to time to fix in advance a date, not more
than seventy (70) nor less than ten (10) days before the date of any meeting of
the stockholders, a date in connection with the obtaining of the consent of
stockholders for any purpose, or the date of any other action requiring a
determination of the stockholders, as the record date for the determination of
the stockholders entitled to notice of and to vote at any such meeting and any
adjournment thereof, or of the stockholders entitled to give such consent or
take such action, as the case may be. In no event may a record date so fixed
by the Board of Directors precede the date on which the resolution establishing
such record date is adopted by the Board of Directors. Only those stockholders
listed as stockholders of record as of the close of business on the date so
fixed as the record date shall be entitled to notice of and to vote at such
meeting and any adjournment thereof, or to exercise such rights or to give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of this Corporation after any such record date fixed as aforesaid. If
the Board of Directors fails to establish a record date as provided herein, the
record date shall be deemed to be the date ten (10) days prior to the date of
the stockholders' meeting.
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<PAGE> 15
Section 2. Record Date for Dividend and Other Distributions.
The Board of Directors is authorized from time to time to fix in advance a date
as the record date for the determination of the stockholders entitled to
receive a dividend or other distribution. Only those stockholders listed as
stockholders of record as of the close of business on the date so fixed as the
record date shall be entitled to receive the dividend or other distribution, as
the case may be, notwithstanding any transfer of any stock on the books of this
Corporation after any such record date fixed as aforesaid. If the Board of
Directors fails to establish a record date as provided herein, the record date
shall be deemed to be the date of authorization of the dividend or other
distribution.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and this
Corporation may pay, dividends on its outstanding shares of capital stock in
the manner and upon the terms and conditions provided by the Articles of
Incorporation and by law. Subject to the provisions of the Articles of
Incorporation and to law, dividends may be paid in cash or property, including
shares of stock or other securities of this Corporation.
ARTICLE XI
FISCAL YEAR
The fiscal year of this Corporation shall be the period selected by
the Board of Directors as the fiscal year.
ARTICLE XII
SEAL
A corporate seal, if adopted by the Board, shall have the name of this
Corporation, the word "SEAL" and the year of incorporation inscribed thereon,
or be in such other form as the Board may determine, and may be a facsimile,
engraved, printed or impression seal.
ARTICLE XIII
STOCK IN OTHER CORPORATIONS
Shares of stock in other corporations held by this Corporation shall
be voted by the President or such other officer or officers or other agent or
agents of this Corporation as the Board of Directors shall from time to time
designate for the purpose or by a proxy thereunto duly authorized by the Board
or the President.
15
<PAGE> 16
ARTICLE XIV
AMENDMENTS
Except as may be contrary to law of the Articles of Incorporation of
this Corporation, these Bylaws may be altered, amended or repealed in any
respect and one or more new Bylaws may be adopted by the Board of Directors;
provided that any Bylaw or amendment thereto as adopted by the Board of
Directors may be altered, amended or repealed by vote of the stockholders
entitled to vote thereon, or a new Bylaw in lieu thereof may be adopted by the
stockholders, and the stockholders may prescribe in any Bylaw made by them that
such Bylaw shall not be altered, amended or repealed by the Board of Directors.
ARTICLE XV
EMERGENCY BYLAWS
Section 1. Scope of Emergency Bylaws. The emergency Bylaws
provided in this Article XV shall be operative during any emergency,
notwithstanding any different provision set
forth in the preceding Articles hereof; provided, however, that to the extent
not inconsistent with the provisions of this Article XV and the emergency
Bylaws, the Bylaws provided in the preceding Articles shall remain in effect
during such emergency. For purposes of the emergency Bylaw provisions of this
Article XV, an emergency shall exist if a quorum of this Corporation's
directors cannot readily be assembled because of some catastrophic event. Upon
termination of the emergency, these emergency Bylaws shall cease to be
operative.
Section 2. Call and Notice of Meeting. During any emergency, a
meeting of the Board of Directors may be called by any officer or director of
this Corporation. Notice of the date, time and place of the meeting shall be
given by the person calling the meeting to such of the directors as it may be
feasible to reach by any available means of communication. Such notice shall
be given at such time in advance of the meeting as circumstances permit in the
judgment of the person calling the meeting.
Section 3. Quorum and Voting. At any such meeting of the Board
of Directors, a quorum shall consist of any one or more directors, and the act
of the majority of the directors present at such meeting shall be the act of
this Corporation.
Section 4. Appointment of Temporary Directors.
(a) The director or directors who are able to be
assembled at a meeting of directors during an emergency may assemble for the
purpose of appointing, if such directors deem it necessary, one or more
temporary directors (the "Temporary Directors") to serve as directors of this
Corporation during the term of any emergency.
(b) If no directors are able to attend a meeting of directors
during an emergency, then such stockholders as may reasonably be assembled
shall have the right, by majority vote of those
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<PAGE> 17
assembled, to appoint Temporary Directors to serve on the Board of Directors
until the termination of the emergency.
(c) If no stockholders can reasonably be assembled in order
to conduct a vote for Temporary Directors, then the President or his or her
successor, as determined pursuant to Section 9 of Article IV herein, shall be
deemed a Temporary Director of this Corporation, and such President or his or
her successor, as the case may be, shall have the right to appoint additional
Temporary Directors to serve with him or her on the Board of Directors of this
Corporation during the term of the emergency.
(d) Temporary Directors shall have all of the rights,
duties and obligations of directors appointed pursuant to Article III hereof,
provided, however, that a Temporary Director may be removed from the Board of
Directors at any time by the person or persons responsible for appointing such
Temporary Director, or by vote of the majority of the stockholders present at
any meeting of the stockholders during an emergency, and, in any event, the
Temporary Director shall automatically be deemed to have resigned from the
Board of Directors upon the termination of the emergency in connection with
which the Temporary Director was appointed.
Section 5. Modification of Lines of Succession. Either before
or during any emergency, the Board of Directors may provide, and from time to
time modify, lines of succession different from that provided in Section 9 of
Article IV in the event that during such an emergency any or all officers or
agents of this Corporation shall for any reason be rendered incapable of
discharging their duties.
Section 6. Change of Principal Office. The Board of Directors
may, either before or during any such emergency, and effective during such
emergency, change the principal office of this Corporation or designate several
alternative head offices or regional offices, or authorize the officers of this
Corporation to do so.
Section 7. Limitation of Liability. No officer, director or
employee acting in accordance with these emergency Bylaws during an emergency
shall be liable except for willful misconduct.
Section 8. Amendment or Repeal. These emergency Bylaws shall be
subject to amendment or repeal by further action of the Board of Directors or
by action of the stockholders, but no such amendment or repeal shall affect the
validity of any action taken prior to the time of such amendment or repeal. Any
amendment of these emergency Bylaws may make any further or different provision
that may be practical or necessary under the circumstances of the emergency.
ARTICLE XVI
PRECEDENCE OF LAW AND ARTICLES OF INCORPORATION
Any provision of the Articles of Incorporation of this Corporation
shall, subject to law, control and take precedence over any provision of these
Bylaws inconsistent therewith.
17
<PAGE> 1
EXHIBIT 4.4
-----------------------------------------------------------
STOCKHOLDER RIGHTS AGREEMENT
-----------------------------------------------------------
ECHELON INTERNATIONAL CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON
AS RIGHTS AGENT
-----------------------------------------------------------
DATED AS OF NOVEMBER 15, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. Certain Definitions.................................................................................. 1
Section 2. Appointment of Rights Agent.......................................................................... 4
Section 3. Issue of Right Certificates.......................................................................... 4
Section 4. Form of Right Certificates........................................................................... 6
Section 5. Countersignature and Registration.................................................................... 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated
Destroyed, Lost or Stolen Right Certificates......................................................... 7
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights........................................ 7
Section 8. Cancellation and Destruction of Right Certificates................................................... 8
Section 9. Availability of Shares of Preferred Stock............................................................ 9
Section 10. Preferred Stock Record Date........................................................................ 10
Section 11. Adjustment of Purchase Price, Number of Shares and Number of Rights................................ 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......................................... 17
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets
or Earnings Power............................................................................... 17
Section 14. Fractional Rights and Fractional Shares............................................................ 20
Section 15. Rights of Action................................................................................... 21
Section 16. Agreement of Right Holders......................................................................... 22
Section 17. Right Certificate Holder Not Deemed a Stockholder.................................................. 22
Section 18. Concerning the Rights Agent........................................................................ 23
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......................................... 23
Section 20. Duties of Rights Agent............................................................................. 24
Section 21. Change of Rights Agent............................................................................. 25
</TABLE>
i.
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
Section 22. Issuance of New Right Certificates................................................................. 26
Section 23. Redemption......................................................................................... 26
Section 24. Exchange........................................................................................... 27
Section 25. Notice of Certain Events........................................................................... 28
Section 26. Notices............................................................................................ 29
Section 27. Supplements and Amendments......................................................................... 29
Section 28. Successors......................................................................................... 30
Section 29. Benefits of this Agreement......................................................................... 30
Section 30. Determinations And Actions by The Board of Directors............................................... 30
Section 31. Severability....................................................................................... 30
Section 32. Governing Law...................................................................................... 30
Section 33. Counterparts....................................................................................... 31
Section 34. Descriptive Headings............................................................................... 31
</TABLE>
ii.
<PAGE> 4
STOCKHOLDER RIGHTS AGREEMENT
THIS STOCKHOLDER RIGHTS AGREEMENT (this "Agreement") is made and
entered into on and effective as of the 15th day of November, 1996 by and
between ECHELON INTERNATIONAL CORPORATION, a Florida corporation (the "Company"
or "Echelon"), and THE FIRST NATIONAL BANK OF BOSTON (the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) of the Company
outstanding as of the close of business (as defined below) on November 15, 1996
(the "Record Date") each Right representing the right to purchase one-hundredth
(subject to adjustment) of a share of Preferred Stock (as hereinafter defined),
upon the terms and subject to the conditions herein set forth, and the Board of
Directors has further authorized and directed the issuance of one Right (subject
to adjustment as provided herein) with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration Date
in accordance with Section 22 hereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meaning
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall at any time be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include a Person who is at such time an Exempt
Person (as such term is hereinafter defined); provided, however, that if the
Board of Directors determines in good faith that a Person who would otherwise be
an Acquiring Person has become such inadvertently (including, without
limitation, because (i) such Person was unaware that it Beneficially Owned a
percentage of Common Stock that would otherwise cause such Person to be a
Acquiring Person or (ii) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of
such Beneficial Ownership under this Stockholder Rights Agreement) and without
any intention of changing or influencing control of the Company, and such
Person, as promptly as practicable after being advised of such determination
divested or divests himself or itself of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer be an
Acquiring Person, then such Person shall not be deemed to be or to have become
an Acquiring Person for any purposes of this Agreement. Notwithstanding the
foregoing, (i) the sole stockholder of the Company at the time of the
effectiveness of this Agreement will not be deemed an Acquiring Person for any
purpose of this Agreement prior to the distribution by such Person of the
Company's outstanding Common Stock to the stockholders of such Person, (ii) if a
Person would be deemed an Acquiring Person upon the effectiveness of this
Agreement because of ownership of 15% or more but less than 20% of the shares
1
<PAGE> 5
of stock on such date, such Person will not be deemed an Acquiring Person for
any purposes of this Agreement unless and until such Person acquires Beneficial
Ownership of any additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common
Stock in shares of Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), after the effectiveness of this Agreement unless upon
the consummation of the acquisition of such additional shares of Common Stock
such Person does not own 15% or more of the shares of Common Stock then
outstanding and (iii) no Person shall become an Acquiring Person as the result
of an acquisition of shares of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the shares of Common Stock
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and thereafter become the
Beneficial Owner of any additional shares of Common Stock (other than pursuant
to a dividend or distribution paid or made by the Company on the outstanding
Common Stock in shares of Common Stock or pursuant to a split or subdivision of
the outstanding Common Stock), then such Person shall be deemed to be an
Acquiring Person unless upon the consummation of the acquisition of such
additional shares of Common Stock such Person does not own 15% or more of the
shares of Common Stock then outstanding. 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 Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed
to have "Beneficial Ownership" of and shall be deemed to "Beneficially Own" any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to Beneficially Own, directly or indirectly within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (x)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y) securities which such Person
has a right to acquire on the exercise of Rights at any time prior to the time a
Person becomes an Acquiring Person or (z) securities issuable upon exercise of
Rights from and after the time a Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the
2
<PAGE> 6
Distribution Date or pursuant to Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) or Section 11(n) hereof with respect to an
adjustment to Original Rights; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own, any security by
reason of such agreement, arrangement or understanding if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are Beneficially Owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B) hereof) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Florida or the
State in which the principal office of the Rights Agent is located, are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., St. Petersburg, Florida time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., St. Petersburg, Florida
time on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the common stock, par value $.01 per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or, in the case of an unincorporated entity, the equivalent
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Equivalent Preferred Shares" shall have the meaning set
forth in Section 11(b) hereof.
(i) "Exempt Person" shall mean the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, or, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company.
(j) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(k) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
3
<PAGE> 7
(l) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(m) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the form of Articles of Amendment
attached to this Agreement as Exhibit A.
(n) "Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(o) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(q) "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 or such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
(r) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are Beneficially Owned, directly or
indirectly, by such Person, and any corporation or other entity that is
otherwise controlled by such Person.
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 the 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 upon ten (10) days' prior
written notice to the Rights Agent. No co-Rights Agent shall have any duty to
supervise, nor shall any co-Rights Agent have any liability for or with respect
to any act or omission of, any other co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the intention of
such Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person (other than an Exempt
Person) becoming the Beneficial Owner of shares of Common Stock aggregating 15%
or more of the Common Stock then outstanding (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights), the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights
4
<PAGE> 8
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the holders thereof and
not by separate Right Certificates, and (y) the Rights will be transferable only
in connection with the transfer of Common Stock. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a "Right Certificate"), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of Preferred
Stock, in substantially the form of Exhibit C hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Stock outstanding on the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Stock
represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them a legend
to substantially the following effect:
This certificate also evidences and entitles the holder of this
certificate to certain Rights as set forth in the Stockholder Rights
Agreement (the "Rights Agreement") between Echelon International
Corporation (the "Corporation") and the rights agent named therein (the
"Rights Agent"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal office of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Corporation 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 issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
5
<PAGE> 9
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this Section 3(c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of the New York Stock Exchange or of any other stock exchange
or automated quotation system on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Sections 11, 13 and
22 hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the price per one one-hundredth of a share of Preferred Stock
set forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by the Chairman of the Board of Directors, the President, any of the Vice
Presidents, the Treasurer or the Controller of the Company, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, 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 Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this 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 an office or agency designated for such purpose, books for
registration and transfer of the Right
6
<PAGE> 10
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14
hereof, at any time after the close of business on the Distribution Date, and
prior to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a share of Preferred Stock as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-hundredth of a share of Preferred
Stock as to which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the earliest of (i) the close of business on
November 14, 2006 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date") or
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof.
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(b) The Purchase Price shall be initially $55.00 for each one
one-hundredth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-hundredths of a share of
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with Section 7(c) hereof.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock certificates for the number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-hundredths
of a share of Preferred Stock as are to be purchased (in which case certificates
for the Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the exercisable
Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of
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<PAGE> 12
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 Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. AVAILABILITY OF SHARES 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 any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the time
that a Person becomes an Acquiring Person, shares of Common Stock and other
securities) issuable upon the exercise of Rights may be listed or admitted to
trading on the New York Stock Exchange or listed on any other national
securities exchange or quotation system, 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 or admitted to trading on the New York
Stock Exchange or listed on any other exchange or quotation system upon official
notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
shares of Preferred Stock (and following the time that a Person first becomes an
Acquiring Person, shares of Common Stock and other securities) upon the exercise
of Rights, to register and qualify such shares of Preferred Stock (and following
the time that a Person first becomes an Acquiring Person, shares of Common Stock
and other securities) under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon 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.
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 and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(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 (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
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<PAGE> 13
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Stock (or shares of Common
Stock or other securities) in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates or depositary receipts for Preferred Stock (or
shares of Common Stock or other securities) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by that
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND
NUMBER OF RIGHTS.
The Purchase Price, the number of shares of Preferred Stock or other
securities or property purchasable upon exercise of 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 Preferred Stock or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the Record Date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
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<PAGE> 14
Preferred Stock transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
(ii) Subject to Section 24 hereof, in the event that any
Person becomes an Acquiring Person, then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to such Person
becoming an Acquiring Person multiplied by the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such Person becoming an Acquiring Person, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise at a price equal to the Purchase Price (as so
adjusted), in accordance with the terms of this Agreement and in lieu of shares
of Preferred Stock, such number of shares of Common Stock (or at the option of
the Company, such number of one one-hundredths of shares of Preferred Stock) as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50% of the
then Current Per Share Market Price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date such Person became an Acquiring
Person; provided, however, that the Purchase Price and the number of shares of
Common Stock so receivable upon exercise of a Right shall thereafter be subject
to further adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary, however, from and
after the time (the "Invalidation Time") when any Person first becomes an
Acquiring Person, any Rights that are Beneficially Owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the Invalidation Time or (z) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who became a transferee prior to or
concurrently with the Invalidation Time pursuant to either (I) a transfer from
the Acquiring Person to holders of its equity securities or to any Person with
whom it has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this Section 11(a)(ii), and subsequent
transferees of such Persons, shall be void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the Invalidation Time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that represents Rights that are
or have become void pursuant to the provisions of this Section 11(a)(ii), and
any Right Certificate delivered to the Rights Agent that represents Rights that
are or have become void pursuant to the provisions of this Section 11(a)(ii)
shall be cancelled. From and after the occurrence of an event specified in
Section 13(a) hereof, any Rights that theretofore have not been exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with Section
11(a)(ii) hereof such number or fractions of shares of Preferred Stock having an
aggregate current market value equal to the Current
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<PAGE> 15
Per Share Market Price of a share of Common Stock. In the event that there shall
not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Board of Directors shall, to the
extent permitted by applicable law and any material agreements then in effect to
which the Company is a party (A) determine the excess of (1) the value of the
shares of Common Stock issuable upon the exercise of a Right in accordance with
Section 11(a)(ii) hereof (the "Current Value") over (2) the then current
Purchase Price multiplied by the number of one one-hundredths of shares of
Preferred Stock for which a Right was exercisable immediately prior to the time
that the Acquiring Person became such (such excess, the "Spread"), and (B) with
respect to each Right (other than Rights which have become void pursuant to
Section 11(a)(ii) hereof), make adequate provision to substitute for the shares
of Common Stock issuable in accordance with Section 11(a)(ii) hereof upon
exercise of the Right and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) shares of Preferred Stock or other
equity securities of the Company (including, without limitation, shares or
fractions of shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the Board of Directors to have
substantially the same value as the shares of Common Stock (such shares of
preferred stock and shares or fractions of shares of preferred stock are
hereinafter referred to as "Common Stock Equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price), where
such aggregate value has been determined by the Board of Directors upon the
advice of a nationally recognized investment banking firm selected in good faith
by the Board of Directors; provided, however, if the Company shall not make
adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the date that the Acquiring Person became such (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements then in effect to
which the Company is a party, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to the
extent available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
date any Person becomes an Acquiring Person, the Board of Directors shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, then, if the Board of Directors so elects, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii)
hereof and the last sentence of this Section 11(a)(iii) 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 second 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 shares of Common Stock shall be the Current Per Share Market
Price (as
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determined pursuant to Section 11(d)(i) hereof) on the Section 11(a)(ii) Trigger
Date and the per share or fractional value of any "Common Stock Equivalent"
shall be deemed to equal the Current Per Share Market Price of the Common Stock.
The Board of Directors may, but shall not be required to, establish procedures
to allocate the right to receive shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a Record Date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such Record Date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent Preferred
Shares")) or securities convertible into Preferred Stock or Equivalent Preferred
Shares at a price per share of Preferred Stock or Equivalent Preferred Shares
(or having a conversion price per share, if a security convertible into shares
of Preferred Stock or Equivalent Preferred Shares) less than the then Current
Per Share Market Price of the Preferred Stock (determined pursuant to Section
11(d) hereof) on such Record Date, the Purchase Price to be in effect after such
Record Date shall be determined by multiplying the Purchase Price in effect
immediately prior to such Record Date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent Preferred Shares
outstanding on such Record Date plus the number of shares of Preferred Stock and
Equivalent Preferred Shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such Record Date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a Record Date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such Record
Date had not been fixed.
(c) In case the Company shall fix a Record Date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such Record
Date shall be determined by multiplying the Purchase Price in effect immediately
prior to such Record Date by a fraction, the numerator of which shall be the
then Current Per Share Market Price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such Record Date, less the fair market value (as
determined in good faith by the Board of Directors whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such Current Per Share Market Price (determined
pursuant to Section 11(d) hereof)
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of the Preferred Stock. Such adjustments shall be made successively whenever
such a Record Date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such Record Date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "Current Per Share Market Price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the Current Per
Share Market Price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares, or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the Record Date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for any day shall
be (X) 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 by (1) the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, or (2) if the Security is not listed or admitted to trading on
the New York Stock Exchange, the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading, or (Y) if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices, as reported by any market operated by The Nasdaq Stock
Market, Inc. ("Nasdaq") or any successor organization, or (Z) if prices for the
Security are not reported by any such market or organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Security and selected by the Board of Directors. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the Current Per Share Market Price of the
Preferred Stock shall be determined in accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred Stock is not publicly traded but the
Common Stock is publicly traded, the Current Per Share Market Price of the
Preferred Stock shall be conclusively deemed to be the Current Per Share Market
Price of the Common Stock as determined pursuant to Section 11(d)(i) hereof
multiplied by one hundred (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof). If
neither the Common Stock nor the Preferred Stock is publicly traded, Current Per
Share Market Price shall mean the fair value per share as determined in good
faith by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried for-
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<PAGE> 18
ward and taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a share of Preferred Stock or share of Common Stock or other
share or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) 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 Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest one ten-
thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately prior to
such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share 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 Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company may, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such Record Date Right Certificates evidencing,
subject to Section
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14 hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the Record Date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a share of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.
(k) The Company may take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares at the Purchase Price (including as adjusted from time to time in
accordance with the terms of this Agreement).
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a Record Date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such Record Date of
the Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash or Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to in Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of a dividend payable in Common Stock) into a greater or lesser number
of Common Stock, then in any such case, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered thereafter,
shall be proportionately adjusted so that the number of Rights
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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.
(o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections 23,
24 or 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 eliminate the benefits intended to be afforded by the
Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Stock
or the Preferred Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof (if so required under 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 certificate.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF ASSETS
OR EARNINGS POWER.
(a) In the event, directly or indirectly, at any time after any Person
has become an Acquiring Person, (i) the Company shall merge with and into any
other Person, (ii) any Person shall consolidate with the Company, or any Person
shall merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other
property, (iii) the Company shall effect a statutory share exchange with the
outstanding Common Stock of the Company being exchanged for stock or other
securities of any other Person, or for money or other property, or (iv) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person (other than
the Company or one or more of its wholly-owned Subsidiaries), then upon the
first occurrence of such event, proper provision shall be made so that: (A) each
holder of record of a Right (other than Rights which have become void pursuant
to Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable (whether or not such Right was then exercisable)
immediately prior to the time that any Person first became an Acquiring Person
(each as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m) hereof), in accordance with the terms of this
Agreement and in lieu of Preferred Stock, such number of validly issued, fully
paid and non-assessable and freely
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tradeable shares of Common Stock of the Principal Party (as defined herein) 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 one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the time
that any Person first became an Acquiring Person (as subsequently adjusted
thereafter pursuant to Sections 11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)
hereof) and (2) dividing that product by 50% of the then Current Per Share
Market Price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d)(i) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; provided that the Purchase Price and the number of
shares of Common Stock of such Principal Party issuable upon exercise of each
Right shall be further adjusted as provided in Section 11(f) hereof to reflect
any events occurring in respect of such Principal Party after the date of the
such consolidation, merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
shares of Common Stock in accordance with Section 9 hereof) in connection with
such consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common Stock
of the Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii) of
the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
the shares of Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not survive the merger,
the Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a) hereof, the Person that is the issuer of any
securities for which shares of Common Stock of the Company are exchanged, and if
no securities are so exchanged, the Person that is the other party to such share
exchange; and
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(iii) in the case of any transaction described in (iv) of the
first sentence in 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, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the foregoing
clause (b)(i), (b)(ii) or b(iii), if the Common Stock of such Person is not at
such time or has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, then (1) if such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, and the Common Stocks of all of such persons have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof
and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Final Expiration Date,
and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or admit to trading
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of the
Rights to be reported by such other system then in use;
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(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its articles or certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13 hereof,
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person enter into any transaction of
the type contemplated by (i) - (iv) of Section 13(a) hereof if (x) at the time
of or immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (y)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer of other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (z) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights (except prior
to the Distribution Date in accordance with Section 11(n) hereof). In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be (W) 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,
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<PAGE> 24
regular way, in either case as reported by (1) the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or (2) if the Rights are not listed or
admitted to trading on the New York Stock Exchange, 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 (X) 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, as reported by any market operated
by Nasdaq or any successor organization, or (Y) if prices for the Rights are not
reported by any such market or organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights and selected by the Board of Directors, or (Z) if no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
deter mined in good faith by the Board of Directors.
(b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a share of Preferred
Stock shall be the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay 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 (as determined in
accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and
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<PAGE> 25
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on his own behalf and for his own benefit, may enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the 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
Right Certificates or the Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
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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
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 arising therefrom, directly or indirectly.
(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 Right
Certificate or certificate for the Preferred Stock or Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
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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 Right 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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board of
Directors, the President, any Vice President, the Treasurer, the Controller or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 and 24 hereof, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of a certificate furnished pursuant to Section 12 hereof, describing such change
or adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments
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and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman of the
Board of Directors, the President, the Chief Financial Officer or the Secretary
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 by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after
the date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the Distribution
Date, to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to
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<PAGE> 29
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock or Preferred Stock by registered or certified
mail, and, following the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the ap pointment 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 any State thereof, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock or
Preferred Stock, and, following the Distribution Date, mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such forms 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 Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company in each case existing prior to the
Distribution Date, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors may, at any time prior to such time as any
Person first becomes an Acquiring Person, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the redemption price being hereinafter referred
26
<PAGE> 30
to as the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the current
market price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a) hereof (or at such later time
as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption
Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors may, at its option, at any time after any
Person first becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have not
become effective or that have become void pursuant to the provisions of Section
11(a)(ii) 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 after the date hereof (such
amount per Right being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time (1) after any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares
of Common Stock then outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 hereof and may not be exchanged pursuant to this
Section 24(a). The exchange of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors ordering the exchange of any Rights pursuant to Section 24(a) hereof
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of the Rights so exchanged at their
last addresses
27
<PAGE> 31
as they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The Company may at its option and, in the event that there shall
not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or Equivalent Preferred Shares as such term is defined in
Section 11(b) hereof) such that the Current Per Share Market Price (determined
pursuant to Section 11(d) hereof) of one share of Preferred Stock (or Equivalent
Preferred Share) multiplied by such number or fraction is equal to the Current
Per Share Market Price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange).
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the Record Date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the Common Stock
and/or 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 10 days prior to the Record Date for determining holders of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Stock and/or
Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13
hereof shall occur then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
28
<PAGE> 32
and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Echelon International Corporation
One Progress Plaza, Suite 2400
St. Petersburg, FL 33701
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be 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:
The First National Bank of Boston
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Except as otherwise provided in this Section 27, for so long as the
Rights are then redeemable, the Company may in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of the Rights. At any time when the Rights are no longer redeemable, except as
otherwise provided in this Section 27, the Company may, 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 to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, (iii) shorten or
lengthen any time period hereunder, or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), and no such amendment may cause
the rights again to become redeemable or cause the Agreement again to become
amendable other than in accordance with this sentence. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made which decreases the Redemption Price.
29
<PAGE> 33
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement or
applicable to this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW.
This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Florida and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State.
30
<PAGE> 34
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ECHELON INTERNATIONAL
CORPORATION
By:
-----------------------------
DARRYL A. LECLAIR, President
THE FIRST NATIONAL BANK
OF BOSTON
By:
-----------------------------
Authorized Officer
31
<PAGE> 35
Exhibit A
FORM
OF
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
PROVIDING FOR
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ECHELON INTERNATIONAL CORPORATION
(Pursuant to Section 607.0602 of the
Florida Business Corporation Act)
-----------------------------------------------------
ECHELON INTERNATIONAL CORPORATION, a corporation organized and existing
under the laws of State of Florida (this "Corporation"), in order to amend and
restate its Articles of Incorporation in accordance with the requirements of
Chapter 607.0602, Florida Statutes, does hereby certify as follows:
1. The name of this Corporation is ECHELON INTERNATIONAL CORPORATION.
2. The amendment effected hereby was duly adopted by the Board of
Directors of this Corporation on , 1996, and shall become effective upon filing
hereof with the Florida Department of State.
3. The amendment effected hereby is as follows:
Pursuant to the authority granted to and vested in the Board of
Directors (hereinafter called the "Board of Directors" or the "Board") in
accordance with the provisions of the Company's Articles of Incorporation, as
amended to date (hereinafter called the "Articles of Incorporation"), the Board
of Directors hereby creates a series of Preferred Stock, par value $.01 per
share, of the Company and hereby states the designation and number of shares,
and fixes the relative rights, powers and preferences thereof, and the
limitations thereof, as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be_________. Such number of shares may be
Exhibit A - 1
<PAGE> 36
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any
series of Preferred Stock of the Company (the "Preferred Stock") (or any
similar stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $_____ per share, of the
Company (the "Common Stock") and of any other stock of the Company ranking
junior to the Series A Preferred Stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of January,
April, July, and October in each year (each such date being referred to herein
as a "Dividend Payment Date"), commencing on the first Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock, declared on the Common Stock since the immediately
preceding Dividend Payment Date or, with respect to the first Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall at any time after
______________, 1996 declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Section 2(a) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Dividend Payment Date and the next subsequent Dividend Payment Date,
a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be
payable, when, as and if declared, on such subsequent Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the Record Date for the
first Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of issue is
a Dividend Payment Date or is a date after the Record Date for the determination
of holders of shares of Series A Preferred
Exhibit A - 2
<PAGE> 37
Stock entitled to receive a quarterly dividend and before such Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
Record Date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which Record Date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights;
(a) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Articles of Incorporation or
required by law, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters upon which the holders of the Common
Stock of the Company are entitled to vote. In the event the Company shall at
any time after _____________, 1996 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided in the Articles of
Incorporation, as hereby or otherwise hereafter amended, and except as otherwise
required by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Company
having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(c) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not earned or declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to dividends)
to the Series A Preferred Stock;
Exhibit A - 3
<PAGE> 38
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as to
dividends) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock or rights, warrants or options to acquire such
junior stock;
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Company shall not permit any Subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under Section 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their retirement become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (B) to the holders of shares of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Series A liquidation preference and
Exhibit A - 4
<PAGE> 39
the liquidation preferences of all other classes and series of stock of the
Company, if any, that rank on a parity with the Series A Preferred Stock in
respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Preferred Stock and the
holders of such parity shares in the proportion to their respective liquidation
preferences. In the event the Company shall at any time after ________________,
1996 declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are converted into, exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly converted
into, exchanged for or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is converted, exchanged or converted. In the event the Company shall at
any time after ______________, 1996 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
conversion, exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable from any holder.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Company, junior to all other series of
Preferred Stock and senior to the Common Stock.
Section 10. Amendment. If any proposed amendment to the Articles of
Incorporation (including as amended by these Articles of Amendment) would alter,
change or repeal any of the preferences, powers or special rights given to the
Series A Preferred Stock so as to affect the Series A Preferred Stock adversely,
then the holders of the Series A Preferred Stock shall be entitled to vote
separately as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption thereof, in addition
to such other vote as may be required by the laws of the State of Florida.
Exhibit A - 5
<PAGE> 40
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
-----------------------------------------------------
IN WITNESS WHEREOF, these Articles of Amendment are executed on behalf
of the Company by its President and attested by its Secretary this day of
---
, 1996.
- --------------
ATTEST: ECHELON INTERNATIONAL
CORPORATION
By: By:
-------------------------- --------------------------
Secretary President
Exhibit A - 6
<PAGE> 41
Exhibit B
FORM OF RIGHT CERTIFICATE
Certificate No. R- Rights
------- ----
NOT EXERCISABLE AFTER NOVEMBER 14, 2006, OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE STOCKHOLDER RIGHTS
AGREEMENT (THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
ECHELON INTERNATIONAL CORPORATION
This certifies that_________________________ or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Stockholder Rights Agreement, dated as of November 15, 1996 as the same may
be amended from time to time (the "Rights Agreement"), between Echelon
International Corporation, a Florida corporation (the "Company"), and The First
National Bank of Boston (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., St. Petersburg, Florida time, on November 14,
2006 at the office or agency of the Rights Agent designated for such purpose, or
of its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value
$.01 per share (the "Preferred Stock"), of the Company, at a purchase price of
$55.00 per one one-hundredth of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of one one-hundredths of a share of Preferred
Stock which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of November
15, 1996 based on the Preferred Stock as constituted at such date. As provided
in the Rights Agreement, the Purchase Price, the number of one one-hundredths of
a share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
Exhibit B - 1
<PAGE> 42
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to pur chase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for shares of
Preferred Stock or shares of the Company's Common Stock, par value $.01 per
share.
No fractional shares of Preferred Stock or Common Stock will be issued
upon the exercise or exchange of any Right or Rights evidenced hereby (other
than fractions of Preferred Stock which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise or exchange 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 Right
certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________________.
ATTEST: ECHELON INTERNATIONAL
CORPORATION
By: By:
-------------------------- --------------------------
Secretary President
Exhibit B - 2
<PAGE> 43
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON
By:
----------------------------
Authorized Representative
Exhibit B - 3
<PAGE> 44
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED____________________________ hereby sells, assigns
and transfer unto
---------------------------------------------------------
(Please print name and address of transferee)
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint____________
Attorney, to transfer said Rights on the books of the within-named Company, with
full power of substitution.
Dated:
-----------------------
- -----------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program
- --------------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
- -------------------------------------------
Signature
- --------------------------------------------------------------------------------
Exhibit B - 4
<PAGE> 45
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To Echelon International Corporation:
The undersigned hereby irrevocably elects to exercise_________________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock (or other securities or property) issuable upon the exercise of such
Rights and requests that certificates for such shares of Preferred Stock (or
such other securities) be issued in the name of:
- --------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
- --------------------------------------------------------------------------------
(Please print name and address)
Please insert social security
or other identifying number:
-------------------------------
Dated:
----------------------
- ----------------------------
Signature
(Signature must conform to holder's name as specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
Exhibit B - 5
<PAGE> 46
- --------------------------------------------------------------------------------
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
- ---------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
Exhibit B - 6
<PAGE> 47
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE STOCKHOLDER RIGHTS AGREEMENT
(THE "RIGHTS AGREEMENT"), RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On November 4, 1996 the Board of Directors of Echelon International
Corporation (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $.01 per
share of the Company (the "Common Stock"). The dividend is payable on November
15, 1996 (the "Record Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Preferred Stock") of the Company at a price of $55.00
per one one-hundredth of a share of Preferred Stock (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Stockholder Rights Agreement dated as of November 15, 1996 as the same may be
amended from time to time (the "Rights Agreement"), between the Company and The
Fist National Bank of Boston, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (with
certain exceptions an Acquiring Person) have acquired beneficial ownership of
15% or more of the outstanding shares of Common Stock or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuances of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights, will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
Exhibit C - 1
<PAGE> 48
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 14, 2006 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of $1 per
share but will be entitled to an aggregate dividend of 100 times the dividend
declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock will be entitled
to a minimum preferential liquidation payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment of
100 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
Beneficially Owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right at the then
current exercise price of the Right, that number of shares of Common Stock
having a market value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right (other than Rights
Beneficially Owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the person with whom the Company has engaged in the
Exhibit C - 2
<PAGE> 49
foregoing transaction (or its parent), which number of shares at the time of
such transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors may exchange the Rights (other than
Rights owned by such person or group which will have become void), in whole or
in part, at an exchange ratio of one share of Common Stock, or one one-hundredth
of a share of Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $.01 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the redemption price, amend the Rights in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
redemption price, amend the Rights in any manner that does not adversely affect
the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 10 dated
September 23, 1996, as amended. A copy of the Rights Agreement is available free
of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
Exhibit C - 3
<PAGE> 1
EXHIBIT 5
TRENAM, KEMKER, SCHARF, BARKIN, FRYE, O'NEILL & MULLIS [LETTERHEAD]
December 18, 1996
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, DC 20549
Re: Echelon International Corporation
1996 Employee Stock Purchase Plan
Registration Statement on Form S-8
Ladies and Gentlemen:
We have represented Echelon International Corporation (the "Company")
in connection with the Company's Registration Statement on Form S-8 (the "S-8
Registration Statement") relating to the offering by the Company (the
"Offering") of 75,000 shares of the Company's Common Stock under the Company's
Employee Stock Purchase Plan (the "Plan"). This opinion is being provided as
Exhibit 5 to the S-8 Registration Statement.
In our capacity as counsel to the Company in connection with the S-8
Registration Statement and the Offering, we have examined and are familiar with:
(1) the Company's Amended and Restated Articles of Incorporation and By-laws,
each as currently in effect, (2) the Plan, (3) the S-8 Registration Statement
and (4) such other corporate records and documents and instruments as in our
opinion are necessary or relevant as the basis for the opinions expressed below.
As to various questions of fact material to our opinion, we have relied
without independent investigation on statements or certificates of officials and
representatives of the Company, the Department of State of the State of Florida
and others. In all such examinations, we have assumed the genuineness of all
signatures on original and certified documents and the conformity to original
and certified documents of all copies submitted to us as conformed, photostatic
or other exact copies.
We express no opinion as to the law of any jurisdiction other than of
the State of Florida and the federal laws of the United States of America.
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION DECEMBER 18, 1996
PAGE 2
- --------------------------------------------------------------------------------
Based upon and in reliance on the foregoing, we are of the opinion
that:
1. The Company is a validly existing corporation under the laws of the
State of Florida and its status is active.
2. The Plan has been duly and legally authorized by all required
corporate action.
3. When the following events shall have occurred:
a. the S-8 Registration Statement shall have become
effective in accordance with the Securities Act of
1933, as amended;
b. the shares of Common Stock shall have been offered
and sold as contemplated in the Plan;
c. the consideration specified in the Plan shall have
been received; and
d. the certificates representing such shares shall have
been duly executed, counter-signed and issued by or
on behalf of the Company,
the shares of Common Stock so offered and sold in the Offering will be duly
authorized, validly issued, fully paid and non-assessable shares of the capital
stock of the Company.
This firm hereby consents to the filing of this opinion as an Exhibit
to the S-8 Registration Statement.
Sincerely,
TRENAM, KEMKER, SCHARF, BARKIN,
FRYE, O'NEILL & MULLIS
Professional Association
By:/S/Richard M. Leisner
-----------------------
Richard M. Leisner
<PAGE> 1
[KPMG Peat Marwick LLP LETTERHEAD]
P.O. Box 31002
St. Petersburg, FL 33732
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Echelon International Corporation:
We consent to the use of our reports included herein by reference.
/s/ KPMG Peat Marwick LLP
December 18, 1996
