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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
GLOBECOMM SYSTEMS INC.
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(Exact name of registrant as specified in charter)
DELAWARE 000-22839 11-3225567
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(State of incorporation (Commission (IRS Employer
or organization) File Number) Identification No.)
45 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 516-231-9800
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
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(TITLE OF CLASS)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
PREFERRED STOCK PURCHASE RIGHTS
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(Title of Class)
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Item 1. Desciption of Registant's Securities to be Registered.
On December 3, 1998, the Board of Directors of Globecomm
Systems Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock (the
"Common Stock"), par value $0.001 per share, of the Company. The dividend is
payable on December 15, 1998 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the "Series A
Preferred Stock"), of the Company at a price of $35.00 per Unit (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of December 3, 1998 (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the close of business on
the first date of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial ownership
of 15% or more of the outstanding 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 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 such outstanding 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 with a copy
of the Summary of Rights (Exhibit C of the Rights Agreement) attached thereto.
The Rights Agreement provides that, until the Distribution
Date, 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
issuance 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
Common Stock, outstanding as of the Record Date, even without such notation or
a copy of the Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights 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 Rights Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 15, 2008 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case as described below.
The Purchase Price payable, and the number of Units of Series
A 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 Series A Preferred Stock, (ii) upon the grant to
holders of the Units of Series A Preferred Stock of certain rights or warrants
to subscribe for or purchase Units of Series A Preferred Stock at a price, or
securities convertible into Units of Series A Preferred Stock with a conversion
price, less than the then current market price of the Units of Series A
Preferred Stock or (iii) upon the distribution to holders of the Units of
Series A Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of earnings or retained earnings or
dividends payable in Units of Series A Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of
Series A Preferred Stock issuable upon exercise of each Right 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 Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
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Units of Series A Preferred Stock purchasable upon exercise
of the Rights will not be redeemable. Each Unit of Series A Preferred Stock
will be entitled to an aggregate dividend of 1,000 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Units of Series A Preferred Stock will be entitled to an aggregate payment of
1,000 times the payment made per share of Common Stock. Each Unit of Series A
Preferred Stock will have 1,000 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 exchanged, each Unit of Series A Preferred
Stock will be entitled to receive 1,000 times the amount received per share of
Common Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting
rights, the value of the Series A Preferred Stock, the Units of Series A
Preferred Stock purchasable upon exercise of each Rights should approximate the
value of one share of Common Stock.
In the event that, after the Rights become exercisable, the
Company is acquired in a merger or other business combination transaction with
an Acquiring Person or an affiliate thereof, or 50% or more of its consolidated
assets or earning power are sold to an Acquiring Person or an affiliate
thereof, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon exercise thereof at the then current
exercise price of the Rights, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Rights.
In the event that any person or group of affiliated or
associated persons becomes the beneficial owner of 15% or more of the
outstanding shares of Common Stock proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of Common Stock or Units of Series A Preferred
Stock (or cash, other securities or property) having a market value of two
times the exercise price of the Rights.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding shares of Common Stock and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Stock, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an exchange ratio of
one Unit of Series A Preferred Stock (subject to adjustment) which shall equal,
subject to adjustment to reflect stock splits, stock dividends and similar
transactions occurring after the date hereof, that number obtained by dividing
the Purchase Price by the then current per share market price per Unit of
Series A Preferred Stock on the earlier of (i) the date on which any person
becomes an Acquiring Person and (ii) the date on which a tender or exchange
offer is announced by any person, if upon consummation thereof such person
would be the beneficial owner of 15% or more of the shares of Company Common
Stock then outstanding.
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 Series A Preferred Stock
will be issued (other than fractions which are integral multiples of one
one-thousandth of a share of Series A 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
Units of Series A Preferred Stock on the last trading day prior to the date of
exercise.
At any time on or prior to the close of business on the first
date of a public announcement that a person or group of affiliated or
associated persons acquire beneficial ownership of 15% or more of the
outstanding Common Stock or the date the Rights expire, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price of
$0.01 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. The Rights are also redeemable under other circumstances as specified in
the Rights Agreement.
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The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights
except that from and after a Distribution Date no such amendment may adversely
affect the interests of the 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.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be redeemed
by the Company at the Redemption Price prior to the occurrence of a
Distribution Date.
The Rights Agreement, dated as of December 3, 1998, between
the Company and the Rights Agent, specifying the terms of the Rights, is
attached hereto as an exhibit and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference
to such exhibit.
Item 2. Exhibits.
1. Rights Agreement, dated as of December 3, 1998, between the Company
and American Stock Transfer & Trust Company, which includes the form
of Certificate of Designation for the Series A Junior Participating
Preferred Stock as Exhibit A, the form of Rights Certificate as
Exhibit B and the Summary of Rights to Purchase Series A Preferred
Stock as Exhibit C. Pursuant to the Rights Agreement, printed Right
Certificates will not be mailed until as soon as practicable after the
earlier of (i) the close of business on the first date of a public
announcement that a person or group has acquired beneficial ownership
of 15% or more of the shares of Common Stock or (ii) the tenth (10th)
business day (or such later date as may be determined by action of the
Board of Directors) after a person commences, or announces its
intention to commence, 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 shares of Common Stock.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
GLOBECOMM SYSTEMS INC.
DATE: 12/3/98 By: /s/ Andrew C. Melfi
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Name: Andrew C. Melfi
Title: V.P. and Chief Financial
Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
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1. Rights Agreement, dated as of December 3, 1998, between the Company
and American Stock Transfer & Trust Company, which includes the form
of Certificate of Designation for the Series A Junior Participating
Preferred Stock as Exhibit A, the form of Rights Certificate as
Exhibit B and the Summary of Rights to Purchase Series A Preferred
Stock as Exhibit C. Pursuant to the Rights Agreement, printed Right
Certificates will not be mailed until as soon as practicable after the
earlier of (i) the close of business on the first date of a public
announcement that a person or group has acquired beneficial ownership
of 15% or more of the shares of Common Stock or (ii) the tenth (10th)
business day (or such later date as may be determined by action of the
Board of Directors) after a person commences, or announces its
intention to commence, 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 shares of Common Stock.
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GLOBECOMM SYSTEMS INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
(RIGHTS AGENT)
RIGHTS AGREEMENT
DATED AS OF DECEMBER 3, 1998
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TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions........................................................................... 1
Section 2. Appointment of Rights Agent................................................................... 5
Section 3. Issue of Rights Certificates.................................................................. 5
Section 4. Form of Rights Certificates................................................................... 7
Section 5. Countersignature and Registration............................................................. 8
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates................................................. 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights................................. 9
Section 8. Cancellation and Destruction of Rights Certificates........................................... 11
Section 9. Reservation and Availability of Preferred Stock............................................... 11
Section 10. Preferred Stock Record Date................................................................... 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights............................ 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.................................... 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................... 21
Section 14. Fractional Rights and Fractional Shares....................................................... 24
Section 15. Rights of Action.............................................................................. 25
Section 16. Agreement of Rights Holders................................................................... 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder............................................ 26
Section 18. Concerning the Rights Agent................................................................... 26
Section 19. Merger or Consolidation or Change of Name of Rights Agent..................................... 27
Section 20. Duties of Rights Agent........................................................................ 27
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Section 21. Change of Rights Agent........................................................................ 30
Section 22. Issuance of New Rights Certificates........................................................... 30
Section 23. Redemption and Termination.................................................................... 31
Section 24. Exchange...................................................................................... 32
Section 25. Notice of Certain Events...................................................................... 33
Section 26. Notices....................................................................................... 34
Section 27. Supplements and Amendments.................................................................... 34
Section 28. Successors.................................................................................... 35
Section 29. Determinations and Actions by the Board of Directors.......................................... 35
Section 30. Benefits of This Agreement.................................................................... 35
Section 31. Severability.................................................................................. 36
Section 32. Governing Law................................................................................. 36
Section 33. Counterparts.................................................................................. 36
Section 34. Descriptive Headings.......................................................................... 36
EXHIBITS
Exhibit A - Form of Certificate of Designation of Series A Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Shares of Series A Preferred Stock
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 3, 1998, between
GLOBECOMM SYSTEMS INC., a Delaware corporation (the "Company"), and AMERICAN
STOCK TRANSFER & TRUST COMPANY, a New York corporation (the "Rights Agent").
WHEREAS, effective December 3, 1998 (the "Rights Dividend
Declaration Date"), the Board of Directors authorized and declared a
distribution of one Right (each, a "Right") for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the Close of Business (as
hereinafter defined) on December 15, 1998 (the "Record Date"), each Right
initially representing the right to purchase one one-thousandth of a share (a
"Unit") of Preferred Stock (as hereinafter defined) upon the terms and subject
to the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date (as such terms are
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Common Stock of the Company then outstanding, but shall not include (1) the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding shares of Common Stock for or pursuant to the terms of any
such plan, or (2) David E. Hershberg (the "Permitted Investor"), or any of his
Affiliates or Associates (collectively with the Permitted Investor, the
"Investor Group") to the extent that the members of the Investor Group shall
beneficially own in the aggregate up to, but not exceeding, 20% of the shares
of Common Stock of the Company then outstanding. Notwithstanding the foregoing:
(i) 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 of the Company then
outstanding; (or, in the case of the Investor Group, more than 20% of
the shares of Common Stock of the Company then outstanding); provided,
however, that if a Person shall become the Beneficial Owner of 15% or
more of the shares of Common Stock of the Company then outstanding
(or, in the case of the Investor Group, more than 20% of the shares of
Common Stock of the Company then outstanding) by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional
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shares of Common Stock of the Company, (or, in the case of the members
of the Investor Group, become the Beneficial Owner of any additional
shares of Common Stock of the Company) then such Person shall be
deemed to be an "Acquiring Person" hereunder; and
(ii) if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring Person"
as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such
Person would no longer be an "Acquiring Person" (as defined pursuant
to the foregoing provisions of this paragraph (a)), then such Person
shall not be deemed to be an "Acquiring Person" for any purpose of
this Agreement.
"Adjustment Shares" has the meaning set forth in Section
11(a)(ii).
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as such term is hereinafter defined).
A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any
comparable or successor law or regulation); or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, 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 (whether or not in writing, 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 (other than
the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided further, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (x) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act
Regulations, and (y) is not reportable by such Person 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 (or
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any Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement, arrangement
or understanding, (whether or not in writing, 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 in (B) of subparagraph (ii) above) or
disposing of any securities of the Company; provided, however, that in
no case shall an officer or director of the Company be deemed (A) the
Beneficial Owner of any securities beneficially owned by another
officer or director of the Company solely by reason of actions
undertaken by such persons in their capacity as officers or directors
of the Company or (B) the Beneficial Owner of securities held of
record by the trustee of any employee benefit plan of the Company or
any Subsidiary of the Company for the benefit of any employee of the
Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may
have over the voting of the securities held in the plan;
Notwithstanding anything in this definition of "Beneficial Owner" and
"beneficially own" to the contrary, the phrase "then outstanding," when used
with reference to a Person who is the Beneficial Owner of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own hereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York 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.
"Close of Business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.
"Common Stock" when used with reference to the Company shall
mean the shares of common stock, par value $.001, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or other 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.
"Company" shall have the meaning set forth in the recitals to
this Agreement.
"current per share market price" shall have the meaning set
forth in Section 11(d)(i) hereof.
"Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
"equivalent preferred shares" shall have the meaning set
forth in Section 11(b)
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hereof.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Exchange Act Regulations" shall mean the General Rules and
Regulations under the Exchange Act.
"Exchange Ratio" shall have the meaning set forth in Section
24 hereof.
"Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
"Nasdaq" shall have the meaning set forth in Section 11(d)
hereof.
"Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
"Preferred Stock" shall mean shares of Series A Preferred
Stock, par value $.001, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A.
"preferred stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Purchase Price" shall have the meaning set forth in Section
7(b) hereof.
"Record Date" shall have the meaning set forth in the
recitals to this Agreement.
"Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
"Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
"Right" shall have the meaning set forth in the recitals to
this Agreement.
"Rights Agent" shall have the meaning set forth in the
recitals to this Agreement.
"Rights Certificate" shall have the meaning set forth in
Section 3(a) hereof.
"Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals to this Agreement.
"Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) hereof.
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"Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
"Section 24(a) Exchange Ratio" has the meaning set forth in
Section 24(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares 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.
"Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
"Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
"Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
Shares Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Company's Board
of Directors prior to such time as any Person becomes an Acquiring Person and
of which the Company will give the Rights Agent prompt written notice) after
the date that a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding shares of Common Stock for
or pursuant to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any
successor rule or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding shares of Common Stock for or pursuant to the
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terms of any such plan) to commence, a tender or exchange offer, if upon
consummation thereof such Person would be the Beneficial Owner of 15% or more
of the shares of Company Common Stock then outstanding (the earlier of (i) and
(ii) above being the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
shares of Common Stock registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates, and (y) the right to receive Rights Certificates
will be transferable only in connection with the transfer of shares of Common
Stock. As soon as practicable after the Distribution Date, the Company will
notify the Rights Agent thereof and 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 shares of Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Rights Certificate, in substantially the form
of Exhibit B hereto (a "Rights Certificate"), evidencing one Right for each
share of Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase 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 shares of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
shares of 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 a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the Expiration Date),
the surrender for transfer of any certificate for shares of Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the shares of Common Stock represented thereby.
(c) Certificates for shares of Common Stock which become
outstanding (including, without limitation, reacquired shares of Common Stock
referred to in the last sentence of this paragraph (c)) after the Record Date
but prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement
between Globecomm Systems Inc. and American Stock Transfer &
Trust Company, dated as of December 3, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of Globecomm Systems Inc. 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. Globecomm
Systems Inc. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of
a
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written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as 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.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date and the Expiration Date, the Rights associated
with the shares of Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the shares of Common Stock represented thereby. In the event that the
Company purchases or acquires any shares of Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares of Common
Stock which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase Units of Preferred Stock and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates shall entitle the holders thereof to purchase
the number of Units of Preferred Stock as shall be set forth therein at the
price per Unit of Preferred Stock set forth therein, but the number of such
Units of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(e) hereof shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by
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a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement between Globecomm Systems
Inc. and American Stock Transfer & Trust Company, as Rights
Agent, dated as of December 3, 1998 (the "Rights Agreement").
Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer or Chief Financial
Officer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent
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<PAGE>
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will make and
deliver a new Rights Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Except as provided in Sections 23(c) and 7(e), the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and certification on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each Unit of
Preferred Stock as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on the tenth anniversary hereof (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 (the earlier
of (i), (ii) and (iii) being the "Expiration Date").
(b) The Purchase Price for each Unit of Preferred Stock
pursuant to the exercise of a Right shall initially be $35.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the number of Units of
Preferred Stock (or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with Section 9
hereof in cash, or by certified check or cashier's check payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Stock
9
<PAGE>
(or make available, if the Rights Agent is the transfer agent for the Preferred
Stock) a certificate or certificates for the number of Units of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests or (B) if the Company shall have elected
to deposit the total number of Units of Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the
depositary agent of a depositary receipt or depositary receipts representing
such number of Units of Preferred Stock as are to be purchased (in which case
certificates for the Units of Preferred Stock represented by such receipt or
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) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) may be made in cash or by
certified bank check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing a number of Rights equivalent to the number of Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Rights Certificate or to such registered holder's duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the a majority of the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e) or (iv) any subsequent transferee shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights Certificates or to
any other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or any of such Acquiring Person's Affiliates,
Associates or transferees hereunder.
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<PAGE>
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or 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 Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will use its
reasonable commercial best efforts to cause to be reserved and kept available
out of and to the extent of its authorized and unissued Units of Preferred
Stock not reserved for another purpose that will be sufficient to permit the
exercise in full of all outstanding Rights. Upon the occurrence of any events
resulting in an increase in the aggregate number of shares of Preferred Stock
(or other equity securities of the Company) issuable upon exercise of all
outstanding Rights above the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved.
(b) If the Units of Preferred Stock to be issued and
delivered upon the exercise of the Rights are at any time listed on a national
securities exchange or included for quotation on any transaction reporting
system, the Company shall during the period from the Distribution Date to the
Expiration Date use its best efforts to cause all shares reserved for such
issuance to be listed on such exchange or included for quotation on any such
transaction reporting system upon official notice of issuance upon such
exercise.
(c) The Company shall use its reasonable commercial best
efforts to (i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event in which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause
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<PAGE>
such registration statement to become effective as soon as practicable after
such filing and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. 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, or an exemption therefrom shall be available and until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Units of Preferred Stock
(and, following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of Rights) shall, at the time of delivery of the
certificates for such Units of Preferred Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable and that the Company will comply with all other provisions of
this Agreement.
(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 Rights
Certificates or of any Units of Preferred Stock 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 Rights Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts for Units of Preferred Stock in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts for
Units of Preferred Stock upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for Units of Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and 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 (or, following the occurrence
of a Triggering Event, other securities) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock transfer books of the Company are open;
provided further, however, that if delivery of Units of Preferred Stock is
delayed pursuant to Section 9(c), such Persons shall be deemed to have become
the record holders of such Units of Preferred Stock only when such Units first
become deliverable. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to securities for which the Rights
shall be exercisable,
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<PAGE>
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a holder of a Unit of
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kinds of securities
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
shares of Preferred Stock, (C) combine the outstanding Preferred Stock
into a smaller number of shares 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 Rights exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital
stock which, if such Rights had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer books of the
Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior, to any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event
that (A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and shares of
Company Common Stock shall remain outstanding and unchanged, (2) in
one transaction or a series of transactions, transfer any assets to
the Company or any of its Subsidiaries in exchange (in whole or in
part) for shares of Company Common Stock, for other equity securities
of the Company or any such Subsidiary, or for securities exercisable
for or convertible into shares of equity securities of the Company or
any of its Subsidiaries (whether shares of Company Common Stock or
13
<PAGE>
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible
into such equity securities other than pursuant to a pro rata
distribution to all holders of shares of Company Common Stock, (3)
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary or plan
than those that could have been obtained in arm's-length negotiations
with an unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a) hereof, (4) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity (other
than transactions, if any, consistent with those engaged in, as of the
date hereof, by the Company and such Acquiring Person or such
Associate or Affiliate), assets (including securities or intangible
assets) having an aggregate fair market value of more than $5,000,000,
other than pursuant to a transaction set forth in Section 13(a)
hereof, (5) receive, or any designee, agent or representative of such
Acquiring Person or any Affiliate or Associate of such Acquiring
Person shall receive, any compensation from the Company or any of its
Subsidiaries other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) receive the benefit, directly or
indirectly (except proportionately as a holder of shares of Company
Common Stock or as required by law or governmental regulation), of any
loans, advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the Company or any
of its Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity; or (B) any Person shall
become an Acquiring Person, unless the event causing the Person to
become an Acquiring Person is a transaction set forth in Section
13(a); or (C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries, other than a transaction or transactions to which
the provisions of Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries that is directly
or indirectly beneficially owned by any Acquiring Person or any Person
or any Associate or Affiliate of any Acquiring Person;
then promptly following the occurrence of an event described in Section
11(a)(ii)(A), (B) or (C) (a "Section 11(a)(ii) Event"), proper provision shall
be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right, upon
exercise thereof in accordance with the terms of this Agreement and payment of
the then-current
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Purchase Price, in lieu of the number of Units of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, such number of Units of Preferred Stock as shall equal the
result obtained by multiplying the then-current Purchase Price by the then
number of Units of Preferred Stock for which a Right was exercisable (or would
have been exercisable if the Distribution Date had occurred) immediately prior
to the first occurrence of a Triggering Event, and dividing that product by 50%
of the current per share market price (determined pursuant to Section 11(d)
hereof) for shares of Common Stock on the date of occurrence of the Triggering
Event (such number of Units of Preferred Stock being hereinafter referred to as
the "Adjustment Shares").
(iii) In the event that the number of Units of Preferred
Stock which are authorized by the Company's Amended and Restated
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights, or if any
necessary regulatory approval for such issuance has not been obtained
by the Company, the Company shall, in lieu of issuing Units of
Preferred Stock in accordance with Section 11(a)(ii) hereof, upon
approval by a majority of the Board of Directors: (A) determine the
excess of (1) the value of the Units of Preferred Stock issuable upon
the exercise of a Right (the "Current Value") over (2) the Purchase
Price (such excess being referred to as the "Spread") and (B) with
respect to each Right, make adequate provision to substitute for such
Units of Preferred Stock, upon exercise of the Rights, (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the
Company (including, without limitation, Common Stock or shares or
units of shares of any series of preferred stock which the Board of
Directors of the Company has deemed to have the same value as the
Units of Preferred Stock (such shares or units of preferred stock are
herein called "preferred stock equivalents")), except to the extent
that the Company has not obtained any necessary regulatory approval
for such issuance, (4) debt securities of the Company, except to the
extent that the Company has not obtained any necessary regulatory
approval for such issuance, (5) other assets or (6) any combination of
the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) occurrence of a
Section 11(a)(ii) Event, and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(iii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Units of Preferred Stock (to the extent available),
except to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, and then, if necessary, cash,
which Units and/or cash have an aggregate value equal to the Spread.
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Units of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Units of Preferred Stock
(or shares having the same rights, privileges and preferences as the Preferred
Stock
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("equivalent preferred stock")) or securities convertible into Units of
Preferred Stock or equivalent preferred stock at a price per Unit of Preferred
Stock or equivalent preferred share (or having a conversion price per share, if
a security convertible into Units of Preferred Stock or equivalent preferred
stock) less than the then current per share market price of a Unit of Preferred
Stock (as determined pursuant to Section 11(d)) 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 Units of Preferred
Stock outstanding on such record date plus the number of Units of Preferred
Stock which the aggregate offering price of the total number of Units of
Preferred Stock and/or equivalent preferred stock 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 Units of Preferred Stock outstanding on such
record date plus the number of additional Units of Preferred Stock and/or
equivalent preferred stock 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 a majority of the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Units of Preferred Stock 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 a
distribution to all holders of Units of 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, cash (other than a regular quarterly cash dividend), assets
(other than a dividend payable in Units of Preferred Stock but including any
dividend payable in equity securities other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(d)
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 (as determined pursuant to Section 11(d)) of the
Preferred Stock on such record date, less the fair market value (as determined
in good faith by a majority of the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holder of rights) of the cash,
assets or evidences of indebtedness to be distributed or of such subscription
rights or warrants distributable in respect of a share of Preferred Stock and
the denominator of which shall be such current per share market price (as
determined pursuant to Section 11(d)) of a share of 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) For the purpose of any computation hereunder, the
"current per share market
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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 thirty (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 thirty (30) Trading Days
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
then, and in each such case, the "current per share market price"
shall be appropriately adjusted to reflect the "current market price"
per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the Nasdaq National Market System
("Nasdaq") or, if the Security is not listed or admitted to trading on
the Nasdaq, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the Nasdaq or such other
system then in use, or, if on any such date the Security is not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Security selected by a majority of the Board of Directors. If on
any such date no market maker is making a market in the Security, the
"current per share market price" of such Security on such date as
determined in good faith by the Board of Directors of the Company as
provided for above shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section
11(d)(i). If the "current per share market price" of the Preferred
Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the "current per share
market price" of the Preferred Stock shall be conclusively deemed to
be an amount equal to $1,000 (as such amount may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to shares of Company Common Stock
occurring after the date of this Agreement) multiplied by the current
market price per share of Company Common Stock. If shares of neither
the Company Common Stock nor Preferred Stock is publicly held or so
listed or traded, "current per share market price" of the Preferred
Stock shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company whose determination shall be
described in a statement filed
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<PAGE>
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-thousandth of a share of Preferred Stock or one one-hundredth of any other
share or security as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) hereof, the holder of any Rights thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than Units
of Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Rights and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 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 Units 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), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Units of Preferred Stock (calculated to the nearest one-millionth of a share of
Preferred Stock) obtained by dividing (i) the product obtained by multiplying
(x) the number of Units of Preferred Stock covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price by, (ii) 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 Units 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
Units of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one one-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect
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<PAGE>
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date
of the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per Unit and the number of Units of
Preferred Stock which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable number of Units of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Rights exercised after such record date
of that number of Units of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Units of 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 (fractional or otherwise)
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 (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any Unit of Preferred Stock
at less than the current market price,
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<PAGE>
(iii) issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, (iv) dividends
on Preferred Stock payable in Preferred Stock or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of Units of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger or sale 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 or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the Person which constitutes, or would constitute the "Principal Party" for
purposes of Section 13(a) shall have distributed or otherwise transferred to
its stockholders or other persons holding an equity interest in such Person
Rights previously owned by such Person or any of its Affiliates and Associates;
provided, however, this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge with or into, or sell or
transfer assets or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not,
except as permitted by Section 23 or Section 26, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) 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 outstanding shares of Common Stock payable in shares of
Common Stock or (ii) effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of dividends in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in any such case the number of Units of Preferred Stock purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of Units of Preferred Stock so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event. The adjustments provided for in this Section
11(p) shall be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts
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<PAGE>
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the shares of Common Stock or Units of Preferred Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Rights Certificate in accordance with Section 25 hereof. Notwithstanding the
foregoing sentence, the failure by the Company to make such certification or
give such notice shall not affect the validity of or the force or effect of the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment contained therein and
shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) Except as provided in Section 13(b) hereof, in the event
that, following a Shares Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)), and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)) shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the shares of
Common Stock shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), in one or more
transactions, directly or indirectly, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), (any such event being a "Section 13 Event"), then, and in
each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, such
number of validly authorized and issued, fully paid and non-assessable shares
of Common Stock of the Principal Party (as such term is hereinafter defined),
which shares shall not be subject to any liens, encumbrances, rights of first
refusal, transfer restrictions or other adverse claims, as shall be equal to
the result obtained by (1) multiplying the then current Purchase Price by the
number of Units of Preferred Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such Units of Preferred Stock for which a Right would
be exercisable hereunder but for the occurrence of such Section 11(a)(ii) Event
by the Purchase Price which would be in effect hereunder but for such first
occurrence) and (2) dividing that product (which, following the direct
occurrence of a Section 13 Event, shall be the "Purchase Price" for all
purposes of this Agreement) by 50% of the current per share market price
(determined pursuant to Section 11(d)) of the shares of Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall, for all purposes of this
Agreement, thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall apply only to
such
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<PAGE>
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure
that the provisions of this Agreement shall thereafter be applicable to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) shall be of no further effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of shares of Common Stock that has the
highest aggregate current market price (determined pursuant to Section
11(d)) and (B) if no securities are so issued, the Person that is the
other party to such merger or consolidation, or, if there is more than
one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d));
and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party
receiving the largest 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 transferred pursuant
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)); provided,
however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Stock"), or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person that
has Registered Common Stock outstanding, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered
Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such other
Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the
Registered Common Stock having the highest aggregate current per share
market price (determined pursuant to Section 11(d)); and (4) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the
greatest stockholders' equity or, if no such
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<PAGE>
ultimate parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the shares of Common Stock
that may be acquired upon exercise of the Rights, (B) cause such
registration statement to remain effective (and to include a
prospectus complying with the requirements of the Securities Act)
until the Expiration Date, and (C) as soon as practicable following
the execution of such agreement take such action as may be required to
ensure that any acquisition of such shares of Common Stock upon the
exercise of the Rights complies with any applicable state securities
or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or Bylaws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, 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 (determined pursuant to Section 11(d)) or
securities exercisable for, or convertible into, shares of Common Stock of such
Principal Party at less than such then current marker price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
the shares of Common Stock of such Principal Party pursuant to the provisions
of this Section 13, then, in such event, the Company 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 provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the Nasdaq or, if the Rights are not listed or admitted to trading on the
Nasdaq, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
one-thousandth 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,
however, 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-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one a share of Preferred Stock as
determined pursuant to Section 11(d).
(c) The holder of a Right by the acceptance of the Right
expressly waives such holder's 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
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respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of certificates representing shares
of Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, a certificate representing shares of Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of a certificate
representing shares of Common Stock), may, in such holder's own behalf and for
such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations hereunder, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of the Company's
Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any
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purpose the holder of the Units of Preferred Stock or any other securities of
the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without gross negligence, or willful misconduct on the part of the Rights
Agent, for any action taken, suffered or omitted by the Rights Agent in
connection with the execution, acceptance and administration of this Agreement
and the exercise and performance hereunder of its duties, including the costs
and expenses of defending against and appealing any claim of liability in the
premises. The indemnity provided herein shall survive the termination of this
Agreement and the expiration of the Rights. The costs and expenses incurred in
enforcing this right of indemnification shall be paid by the Company.
The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this
Agreement and the exercise and performance of its duties hereunder in reliance
upon any Rights Certificate or certificate for Units of Preferred Stock or
shares of 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 business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement any of the Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature
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of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions and no implied duties or obligations shall be
read into this Agreement against the Rights Agent, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) Before the Rights Agent acts or refrains from acting, it
may consult with legal counsel of its choice (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the administration, exercise and performance
of its duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof
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(except the due execution hereof by the Rights Agent) or in respect of the
legality, validity or enforceability or the execution of any Rights Certificate
(except its countersignature thereof and has actual knowledge of such change or
adjustment); nor shall it be liable or responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11,
13, 23 or 24, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of the certificate described in
Section 12 hereof or has actual knowledge of 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 Units of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether
any Preferred Stock will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the administration, exercise and
performance of its duties hereunder from any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be responsible or
liable for any action taken, suffered or omitted 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 Rights 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 (5)
Business Days after the date any officer of the Company actually received 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.
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(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if the Rights Agent in good faith believes that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise, transfer, split up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as the
case may be, that the Rights evidenced by the Rights Certificate are not owned
by an Acquiring Person, or an Affiliate or Associate thereof, has either not
been completed or in any manner indicates any other response thereto, the
Rights Agent shall not take any further action with respect to such requested
exercise, transfer, split up, combination or exchange, 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 thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock or Preferred Stock (as to which the
Rights Agent has received prior written notice) by registered or certified
mail, and the Company shall mail notice thereof to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock or Preferred Stock (as to which the Rights
Agent has received prior written notice) by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States, in good standing, authorized under such laws
to exercise corporate trust or stock transfer powers, and 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
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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 mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee benefit plan or arrangement
or upon the exercise, conversion or exchange of securities of the Company
currently outstanding or issued at any time in the future by the Company and
(b) may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued and this
sentence shall be null and void ab initio if, and to the extent that, such
issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Company may, at its option, upon approval by a
majority of the Board of Directors, at any time prior to the earlier of (i) the
Shares Acquisition Date or (ii) the Final Expiration Date redeem all but not
less than all the then outstanding Rights at a redemption price of $0.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, pay the Redemption Price either in cash, shares of Common Stock
(based on the current per share market price thereof (as determined pursuant to
Section 11(d) hereof) at the time of redemption), or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time on such
basis and with such conditions as a majority of the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, and
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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 a majority of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and 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 will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of shares of Common
Stock prior to the Distribution Date.
(c) Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable pursuant to Section 7(a) at
any time when the Rights are redeemable hereunder.
Section 24. Exchange.
(a) The Company, at its option, upon approval by a majority
of the Company's Board of Directors, at any time after any Person becomes an
Acquiring Person, may exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for Units of Preferred Stock
at an exchange ratio equal to, subject to adjustment to reflect stock splits,
stock dividends and similar transactions occurring after the date hereof, that
number obtained by dividing the Purchase Price by the then current per share
market price per Unit of Preferred Stock on the earlier of (i) the date on
which any Person becomes an Acquiring Person and (ii) the date on which a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such plan acting
in such capacity) is first published or sent or given within the meaning of
Rule 14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding (such exchange ratio being
hereinafter referred to as the "Section 24(a) Exchange Ratio"). Notwithstanding
the foregoing, the Company may not effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries, or any
trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any
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<PAGE>
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 Units of Preferred Stock equal to the number of such
Rights held by such holder multiplied by the Section 24(a) Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. 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 Units of Preferred 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 7(e) hereof) held by each holder of
Rights.
(c) In the event that the number of shares of Preferred Stock
which are authorized by the Company's Amended and Restated Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Preferred Stock for issuance upon exchange of the Rights or make adequate
provision to substitute (1) cash, (2) Company Common Stock or other equity
securities of the Company, (3) debt securities of the Company, (4) other
assets, or (5) any combination of the foregoing, having an aggregate value
equal to the Adjustment Spread, where such aggregate value has been determined
by a majority of the Company's Board of Directors. To the extent that the
Company determines that some action need be taken pursuant to subsection (a) of
this Section 24, the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional shares of Preferred Stock and/or
to decide the appropriate form of distribution to be made pursuant to the above
provision 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.
(d) The Company shall not be required to issue fractions
smaller than or to distribute certificates which evidence fractions smaller
than one one-thousandth of a share of Preferred Stock. In lieu thereof, the
Company shall pay to the registered holders of the Rights Certificates with
regard to which such fractional Units would otherwise be issuable an amount in
cash equal to the same fraction of the current market value (as determined
pursuant to Section 11(d)(i) hereof) of one Unit of Preferred Stock.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its 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 Units
of Preferred
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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 of outstanding Preferred
Stock), (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or
pay any dividend on the Common Stock payable in shares of Common Stock or to
effect a subdivision, combination or consolidation of the shares of Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock), then, in each such case, the Company shall give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for the purposes
of such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock and/or
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least ten (10) days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of any
such other action, at least ten (10) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
shares of Common Stock and/or shares of Preferred Stock, whichever shall be the
earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under
Section 11(a)(ii) hereof. In the event any Person becomes an Acquiring Person,
the Company will promptly notify the Rights Agent thereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Globecomm Systems Inc.
45 Oser Avenue
Hauppauge, NY 11788
(516) 231-9800
Attention: Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sent by registered or
certified mail and shall be deemed given upon receipt and
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addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company may supplement or amend this Agreement in any
respect, without the approval of any holders of Rights, by action of its Board
of Directors and the Rights Agent shall, if the Company so directs, execute
such supplement or amendment. From and after the Distribution Date, the Company
may from time to time supplement or amend this Agreement without the approval
of any holders of Rights, by action of its Board of Directors, in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), including, without limitation,
to change the Purchase Price, the Redemption Price, any time periods herein
specified, and any other term hereof, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner which would adversely
affect the interests of the holders of Rights. Upon receipt of a certificate
from an appropriate officer of the Company that the proposed supplement or
amendment is consistent with this Section 27 and, after such time as any Person
has become an Acquiring Person, that the proposed supplement or amendment does
not adversely affect the interests of the holders of Rights, 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. Determinations and Actions by the Board of
Directors. 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 Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors, or
34
<PAGE>
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing),
which are done or made by the Board of Directors in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights Certificates and all other parties and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 30. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, shares of 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 Rights Certificates (and, prior
to the Distribution Date, shares of Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the tenth Business Day
following the date of such determination by the Board of Directors of the
Company.
Section 32. Governing Law. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
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 or convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
35
<PAGE>
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.
ATTEST: GLOBECOMM SYSTEMS INC.
By /s/ Andrew C. Melfi By /s/ David E. Hershberg
---------------------------------- ----------------------------------
Name: Andrew C. Melfi Name: David E. Hershberg
Title: V.P. and CFO Title Chairman and CEO
ATTEST: AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
By /s/ Susan Silber By /s/ Herbert J. Lemmer
----------------------------------- ----------------------------------
Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
36
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
GLOBECOMM SYSTEMS INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------------------------------
Globecomm Systems Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was adopted
by the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on December 3, 1998;
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Corporation (hereinafter called the
"Board of Directors" or the "Board") in accordance with the provisions of the
Certificate of Incorporation, as amended, the Board of Directors hereby creates
a series of Preferred Stock, par value $.001 per share (the "Preferred Stock"),
of the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
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 Three Hundred Thousand (300,000). 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
A-1
<PAGE>
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
each holder of a share of Series A Preferred Stock, in preference to
the holders of shares of Common Stock, par value $.001 per share (the
"Common Stock"), of the Corporation, and of any other junior stock,
shall be entitled to receive, when declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to, subject to the provision for adjustment
hereinafter set forth, One Thousand (1,000) times the aggregate per
share amount of all cash dividends, and One Thousand (1,000) 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 or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of a share or fraction of Series A Preferred Stock. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the preceding
sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the shares of Series A Preferred Stock as provided in paragraph (A)
of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Distribution Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share of Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on each
outstanding share
A-2
<PAGE>
of Series A Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such share of Series
A Participating Preferred Stock, unless the date of issue of such
share is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such share shall begin to
accrue from the date of issue of such share, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to One Thousand (1,000) votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the
number of 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 herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise 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
A-3
<PAGE>
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the shares of 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
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(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 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 Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled
A-4
<PAGE>
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may
be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or 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 One Thousand
Dollars ($1,000) per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"), 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 1,000 times the aggregate amount to be distributed per share to
holders of shares of Common Stock (the "Common Adjustment"), or (2) to the
holders of 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 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 the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) 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 (the "Adjustment Number").
(B) 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 series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Dividend Declaration Date (as defined in the Corporation's Rights
Agreement dated December 3, 1998) (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number
A-5
<PAGE>
of shares, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to One Thousand (1,000)
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Amended and Restated Certificate
of Incorporation of the Corporation shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of
the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least a majority of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Chief Executive Officer and its
corporate seal attested by its President this 3rd day of December, 1998.
------------------------------------
Name:
A-6
<PAGE>
Title:
Attest:
- --------------------------------
Name:
Title:
A-7
<PAGE>
Exhibit B
Form of Rights Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 15, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT THE OPTION OF THE COMPANY AT $0.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SUCH AGREEMENT.]*/
Rights Certificate
GLOBECOMM SYSTEMS INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December 3, 1998 (the "Rights Agreement"),
between Globecomm Systems Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to
- --------
*/ The portion of the legend in bracket shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
<PAGE>
5:00 P.M., New York time, on December 15, 2008 at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent, one one-thousandth (a "Unit") of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $.001 per share (the
"Series A Preferred Stock") of the Company, at a purchase price of $35.00 per
Unit of Series A Preferred Stock (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of Units of Series A 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 December 15, 1998 based on the Series A
Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of Units of Series A Preferred
Stock which may be purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the
happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Series A Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of $0.01 per Right.
No fractional shares of Series A Preferred Stock will be
issued upon the exercise of any Rights or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Series A 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 Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of Units of Series A Preferred Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the
B-2
<PAGE>
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 Rights or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the signature of the proper officers of the Company
and its corporate seal. Dated as of [DATE].
ATTEST: GLOBECOMM SYSTEMS INC.
By
- ------------------------------- --------------------------------
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By
---------------------------------------
Authorized Signatory
B-3
<PAGE>
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________ hereby sells,
assigns and transfers unto_____________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the
within Rights Certificate on the books of the within-named Company, with full
power of substitution.
Dated:______________,_____
---------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a
Securities Transfer Association Inc. recognized signature guarantee medallion
program.
B-4
<PAGE>
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
--------------------------------
NOTICE
The signature in the foregoing Form of Assignment must conform
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment will not be honored.
B-5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate.)
To Globecomm Systems Inc.
The undersigned hereby irrevocably elects to exercise
___________________ Rights represented by this Rights Certificate to purchase
the units of Series A Preferred Stock issuable upon the exercise of such Rights
and requests that certificates for such Series A Preferred Stock be issued in
the name of:
Please insert social security
or other identifying number _________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _________________________________________________
(Please print name and address)
Dated:_______________,_______
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a
Securities Transfer Association Inc. recognized signature guarantee medallion
program.
B-6
<PAGE>
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
---------------------------------
Signature
-----------------------------------------------------
NOTICE
The signature in the foregoing Form of Election to Purchase must
conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Election to Purchase will
not be honored.
B-7
<PAGE>
Exhibit C
GLOBECOMM SYSTEMS INC.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES A PREFERRED STOCK
On December 3, 1998, the Board of Directors of Globecomm
Systems Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock (the
"Common Stock"), par value $.001 per share, of the Company. The dividend is
payable on December 15, 1998 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $.001 per share (the "Series A
Preferred Stock"), of the Company at a price of $35.00 per Unit (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of December 3, 1998 (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the close of business on
the first date of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial ownership
of 15% or more of the outstanding 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 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 such outstanding 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 with a copy
of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date, 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
issuance 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
Common Stock, outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the
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Common Stock as of the Close of Business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 15, 2008 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case as described below.
The Purchase Price payable, and the number of Units of Series
A 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 Series A Preferred Stock, (ii) upon the grant to
holders of the Units of Series A Preferred Stock of certain rights or warrants
to subscribe for or purchase Units of Series A Preferred Stock at a price, or
securities convertible into Units of Series A Preferred Stock with a conversion
price, less than the then current market price of the Units of Series A
Preferred Stock or (iii) upon the distribution to holders of the Units of
Series A Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of earnings or retained earnings or
dividends payable in Units of Series A Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of
Series A Preferred Stock issuable upon exercise of each Right 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 Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Units of Series A Preferred Stock purchasable upon exercise
of the Rights will not be redeemable. Each Unit of Series A Preferred Stock
will be entitled to a dividend equal to any dividend declared per share of
Common Stock. In the event of liquidation, each Unit of Series A Preferred
Stock will be entitled to a payment equal to any payment made per share of
Common Stock. Each Unit of Series A Preferred Stock will have one vote, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Unit of Series A Preferred Stock will be entitled to receive an
amount equal to the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting
rights, the value of each Unit of Series A Preferred Stock purchasable upon
exercise of the Rights should approximate the value of one share of Common
Stock.
In the event that, after the Rights become exercisable, the
Company is acquired in a merger or other business combination transaction with
an Acquiring Person or an affiliate thereof,
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or 50% or more of its consolidated assets or earning power are sold to an
Acquiring Person or an affiliate thereof, proper provision will be made so that
each holder of a Right will thereafter have the right to receive, upon exercise
thereof at the then current exercise price of the Rights, that number of shares
of common stock of the acquiring company which at the time of such transaction
will have a market value of two times the exercise price of the Rights.
In the event that any person or group of affiliated or
associated persons becomes the beneficial owner of 15% or more of the
outstanding shares of Common Stock proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of Common Stock or Units of Series A Preferred
Stock (or cash, other securities or property) having a market value of two
times the exercise price of the Rights.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding shares of Common Stock and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Stock, the Board of Directors
of the Company may exchange all or part of the Rights (other than Rights owned
by such person or group which have become void) for Units of Series A Preferred
Stock at an exchange ratio of (subject to adjustment) which shall equal,
subject to adjustment to reflect stock splits, stock dividends and similar
transactions occurring after the date hereof, that number obtained by dividing
the Purchase Price by the then current per share market price per Unit of
Series A Preferred Stock on the earlier of (i) the date on which any person
becomes an Acquiring Person and (ii) the date on which a tender or exchange
offer is announced by any person, if upon consummation thereof such person
would be the beneficial owner of 15% or more of the shares of Company Common
Stock then outstanding.
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 Series A Preferred Stock
will be issued (other than fractions which are integral multiples of one
one-thousandth of a share of Series A 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
Units of Series A Preferred Stock on the last trading day prior to the date of
exercise.
At any time prior to the earlier of (i) the date a person or
group of affiliated or associated persons acquire beneficial ownership of 15%
or more of the outstanding Common Stock or (ii) the date the Rights expire, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $0.01 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. The Rights are also redeemable under other circumstances
as
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specified in the Rights Agreement.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights
except that from and after a Distribution Date no such amendment may adversely
affect the interests of the 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.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors because the Rights may be
redeemed by the Company at the Redemption Price prior to the occurrence of a
Distribution Date.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. 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, which is
hereby incorporated herein by reference.
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