<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A12B
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
E-SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1183105
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
6250 LBJ Freeway
P.O. Box 660248
Dallas, Texas
(Address of principal executive offices)
75266-0248
(zip code)
----------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be registered to be registered
------------------- -----------------------
Preferred Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant ot Section 12(g) of the Act:
None
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 28, 1994, the Board of Directors of E-Systems, Inc.
(the "Company") adopted a Stockholder Rights Plan, providing that one
Right shall be attached to each share of Common Stock of the Company.
Each Right entitles the registered holder to purchase from the Company
a unit (a "Unit") consisting of one one-thousandth of a share of Series
A Junior Participating Preferred Stock, par value $20.00 per share (the
"Preferred Stock"), at a Purchase Price of $130.00 per Unit (the
"Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of October 7, 1994, between the Company and
Society National Bank, a national banking association, as Rights Agent
(the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificate will be distributed. The Rights will separate
from the Common Stock and a Distribution Date will occur upon the
earlier of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 15% or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on October 17, 2004, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board of Directors, only shares
of Common Stock prior to the Distribution Date will be issued with
Rights.
In the event that an Acquiring Person becomes the beneficial
owner of 15% or more of the then outstanding shares of Common Stock
(unless such acquisition is made pursuant to a tender or exchange
offer for all outstanding shares of the Company, at a price
determined by a majority of the independent Directors of the Company
who are not representatives, nominees, Affiliates or Associates of an
Acquiring Person to be fair and otherwise in the best interest of the
Company and its stockholders), each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the
Company), having a value equal to two times the Exercise Price of the
Right. The Exercise Price is the Purchase Price times the number of
shares of Common Stock associated with each Right (initially, one).
Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph (the "Flip-In Events"), all
Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person
will be null and void. However, Rights are not exercisable following
the occurrence of any of the Flip-In Events set forth above until
such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, at an exercise price of $130 per Right, each Right
not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle
its holder to purchase Common Stock with a value of $260 (or other
consideration, as noted above) for $130. Assuming that the Common
Stock had a per share value of $130 at such time, the holder of each
valid Right would be entitled to purchase 2.0 shares of Common Stock
for $130.
In the event that following the Stock Acquisition Date, (i) the
Company is acquired in a merger or consolidation in which the Company
is not the surviving corporation (other than a merger that follows a
tender offer determined to be fair to the stockholders of the
Company, as described in the preceding paragraph) or (ii) 50% or more
of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been voided as
set forth above) shall thereafter have the right to receive, upon
exercise of the Right, Common Stock of the acquiring company having a
value equal to two times the Exercise Price of the Right.
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants
to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock, or (iii) upon
the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional Units will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the
date of exercise.
At any time until 10 days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right. Under certain circumstances, the decision
to redeem shall require the concurrence of a majority of the
Continuing Directors (as defined below). Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the
adoption of the Rights Plan and any person who is subsequently
elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors, but shall not include an
Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company
as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in
order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of
any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided that no amendment to adjust the
time period governing redemption shall be made at such time as the
Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to
acquire the Company in certain circumstances. Accordingly, the
existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the Rights are not
intended to prevent a takeover, but rather are designed to enhance
the ability of the Board of Directors to negotiate with an acquiror
on behalf of all of the shareholders.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the
Form of Rights Certificate, is attached hereto as an exhibit and
incorporated herein by reference. The foregoing description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to such exhibit.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
E-SYSTEMS, INC.
James W. Crowley
Vice President,
Secretary and General Counsel
Date: October 12, 1994
E-SYSTEMS, INC
and
SOCIETY NATIONAL BANK
Rights Agent
Rights Agreement
Dated as of October 7, 1994
Table of Contents
Section
1. Certain Definitions
2. Appointment of Rights Agent
3. Issue of Rights Certificates
4. Form of Rights Certificates
5. Countersignature and Registration
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Multilated, Destroyed, Lost or Stolen
Rights Certficates
7. Exercise Rights; Purchase Price;
Expiration Date of Rights
8. Cancellation and Destruction of Rights
Certificates
9. Reservation and Availability of
Capital Stock
10. Preferred Stock Record Date
11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights
12. Certificate of Adjusted Purchase Price
or Number of Shares
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power
14. Fractional Rights and Fracitonal Shares
15. Rights of Action
16. Agreement of Rights Holders
17. Rights Certificate Holder Not Deemed
a Stockholder
18. Concerning the Rights Agent
19. Merger or Consolidation or Change of
Name of Rights Agent
20. Duties of Rights Agent
21. Change of Rights Agent
22. Issuance of New Rights Certificates
23. Redemption and Termination
24. Notice of Certain Events
25. Notices
26. Supplements and Amendments
27. Successors
28. Determinations and Actions by the Board
of Directors, etc.
29. Benefits of this Agreement
30. Severability
31. Governing Law
32. Counterparts
33. Descriptive Headings
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 7, 1994 (the
"Agreement"), between E-Systems, Inc., a Delaware corporation (the
"Company"), and Society National Bank, a national banking association
(the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 28, 1994 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized
and declared a dividend distribution of one Right for each share of
common stock, par value $1.00 per share, of the Company (the "Common
Stock") outstanding at the close of business on October 17, 1994 (the
"Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company
issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date each Right
initially representing the right to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock of the Company
having the rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(A) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such plan or (iv) any such Person who has reported or
is required to report such ownership (but less than 25%) on Schedule
13G under the Exchange Act (or any comparable or successor report) or
on Schedule 13D under the Exchange Act (or any comparable or successor
report) which Schedule 13D does not state any intention to or reserve
the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such
Schedule (other than the disposition of the Common Stock) and, within
10 Business Days of being requested by the Company to advise it
regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without
knowledge of the terms of the Rights and who, together with all
Affiliates and Associates, thereafter does not acquire additional
shares of Common Stock while the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding; provided, however, that if the
Person requested to so certify fails to do so within 10 Business Days,
then such Person shall become an Acquiring Person immediately after
such 10 Business Day Period.
(B) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement (the "Exchange
Act").
(C) 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, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then 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 any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subparagraph
(ii) of this paragraph (c)) or disposing of any voting
securities of the Company; provided, however, that nothing in
this paragraph (c) shall cause a person engaged in business
as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through
such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days
after the date of such acquisition.
(D) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to
close.
(E) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(F) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person.
(G) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a member of
the Board, who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or a representative of an Acquiring Person or
of any such Affiliate or Associate, and was a member of the Board prior
to the date of this Agreement, or (ii) any Person who subsequently
becomes a member of the Board, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative of an Acquiring Person or of
any such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved by a
majority of the Continuing Directors.
(H) "Person" shall mean any individual, firm
corporation, partnership or other entity.
(I) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, par value $20.00 per share, of
the Company, and, to the extent that there are not a sufficient number
of shares of Series A Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other series of
Preferred Stock, par value $20.00 per share, of the Company designated
for such purpose containing terms substantially similar to the terms of
the Series A Junior Participating Preferred Stock.
(J) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(K) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(L) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(M) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(N) "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 and
the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates
(A) Until the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date, the
close of business on the Record Date), or (ii) the close of business on
the tenth business day (or such later date as the Board shall
determine) after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) is first published or sent
or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section
3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
right certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(B) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder
of the 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 the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced
by such certificates for the Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date (as such term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(C) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between E-Systems, Inc. (the "Company") and Society National
Bank (the "Rights Agent") dated as of October 7, 1994 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal offices of E-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. E-Systems,
Inc. will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered holders
of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(A) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit 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 on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions
of Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-
thousandths of a share of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per one one-
thousandth of a share, the "Purchase Price"), but the amount and type
of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
(B) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or 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 Section 7(e) of such 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 Vice Chairman, its
President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature and shall not
be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature
by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificates
may be signed on behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the
date of the execution of this 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 principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 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.
(A) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of
(i) the close of business on October 17, 2004, (the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the earlier of (i) and (ii) being herein referred
to as the "Expiration Date").
(A) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be $130.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable
in accordance with paragraph (c) below.
(B) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one one-thousandth of a
share of Preferred Stock (or other shares, securities, cash or other
assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-thousandths of a share 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 shares
of Preferred Stock issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder
of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such
Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii) hereof) shall 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 (including Common Stock) 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. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any
exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
(C) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(D) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts
to insure 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 other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(E) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to the
Rights Agent for cancellation or in 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 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 Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares
of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or
other securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(A) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or
other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such
exercise.
(B) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(iii) hereof, a registration
statement under the Securities Act of 1933 (the "Act"), with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause 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 Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the
Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction
shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration statement shall not
have been declared effective.
(C) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-
thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(D) 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 and of any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax 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 a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at
the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case
may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
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 shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number and kind
of shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section
11.
(A) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of
the Company were open, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(i) In the event that any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall,
at any time after the Rights Dividend Declaration Date,
become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding, unless the event causing the
15% threshold to be crossed is a transaction set forth in
Section 13(a) hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer
for all outstanding shares of Common Stock at a price and on
terms determined by at least a majority of the members of the
Board of Directors who are not officers of the Company and
who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice
from one or more investment banking firms, to be (a) at a
price which is fair to stockholders (taking into account all
factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably
be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its
stockholders, then, promptly following the occurrence of any
such event, proper provision shall be made so that each
holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per share
of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(ii) In the event that the number of shares of
Common Stock which are authorized by the Company's
certificate of incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall (A) determine the
value of the Adjustment Shares issuable upon the exercise of
a Right (the "Current Value"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares,
of preferred stock, such as the Preferred Stock, which the
Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of
preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value (less the amount
of any reduction in the Purchase Price), where such aggregate
value has been determined by the Board based upon the advice
of a nationally recognized investment banking firm selected
by the Board; provided, however, that 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) the first 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)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For
purposes of the preceding sentence, the term "Spread" shall
mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board determines in good faith that
it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full
of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the
"Substitution Period"). To the extent that action is to be
taken pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek such shareholder
approval for such authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment Share shall
be the Current Market Price per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock
on such date.
(B) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if
a security convertible into Preferred Stock or equivalent preferred
stock) less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares 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 shares of Preferred Stock
outstanding on such record date, plus the number of additional shares
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 by delivery of consideration part or all of which may
be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Shares 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
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 Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable
in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator
of which shall be such current market price (as determined pursuant to
Section 11(d) hereof) per 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 be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
(D) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days immediately
prior to such date, and for purposes of computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in each such case,
the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected
by the Board. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board shall be used. The term "Trading
Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per
share shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(i) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If
the Current Market Price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the Current Market Price of a Unit shall be
equal to the Current Market Price of one share of Preferred Stock
divided by 1,000.
(E) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (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 ten-thousandth of a share of
Common Stock or other share or one-millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration
Date.
(F) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and 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 Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(G) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-thousandths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(H) Unless the Company shall have exercised its
election as provided in Section 11(i), 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 one one-thousandths of a share
of Preferred Stock (calculated to the nearest one-millionth) obtained
by (i) multiplying (x) the number of one one-thousandths of a share
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, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(I) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of one one-thousandths of a share
of Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated
to the nearest one-ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) 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 so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(J) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandth of a share 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 one one-thousandth of a share and the number of
one one-thousandth of a share 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 stated value, if
any, of the number of one one-thousandths of a share 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 such number of one one-thousandth of a share 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 issuance to the holder of any Right
exercised after such record date the number of one one-thousandths of a
share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number
of one one-thousandths of a share 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) or securities
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 in their good
faith judgment the Board of Directors of the Company shall determine to
be advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(N) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), 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 shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(O) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(P) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the occurrence
of such event.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate
(or, if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(A) In the event that, following the Stock Acquisition
Date, directly or indirectly, (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) hereof),
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)
hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case
(except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share 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 one one-thousandths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by (2) 50% of the current market price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock) in connection with the consummation of
any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be,
in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any
Section 13 Event.
(B) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; 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 greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market
value.
(C) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its 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, as soon as practicable after the
date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) will 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.
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).
Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant
to a tender offer or exchange offer for all outstanding shares of
Common Stock which complies with the provisions of Section 11(a)(ii)(B)
hereof (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all holders
of shares of Common Stock whose shares were purchased pursuant to such
tender offer or exchange offer and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration
paid pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(A) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided
in Section 11(p) hereof, 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 purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
(B) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions 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 shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of
Preferred Stock). 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 may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one one-
thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock (as determined pursuant
to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(C) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(D) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of
a Right by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(A) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(B) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(C) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights 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, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(D) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the number of one one-thousandths of a share of Preferred
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any 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 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(A) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the
premises.
(B) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or
for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(A) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
(B) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon
the following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(A) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(B) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of "current market price")
be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(C) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(D) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates),
but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(E) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of Common Stock or Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(F) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(G) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Vice Chairman, the
President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any
such officer.
(H) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(I) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(J) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(K) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed to
the Company, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and 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 and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of
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 his Rights Certificate
for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United
States or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, which
is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the 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 redemption or
expiration of the Rights, 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 plan or arrangement, granted or awarded
as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued 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
if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights
Certificate would be issued, 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 Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business
on the tenth day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the
close of business on the tenth day following the Record 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, as such
amount may be 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"); provided, however, if the Board of Directors of the Company
authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii) below, then there must be Continuing
Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (i) such
authorization occurs on or after the time a Person becomes an Acquiring
Person, or (ii) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation) in a majority
of the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or, if
upon the commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming
an Acquiring Person or which would cause the occurrence of a Triggering
Event unless, concurrent with such solicitation, such Person (or one or
more of its Affiliates or Associates) is making a cash tender offer
pursuant to a Schedule 14D-1 (or any successor form) filed with the
Securities and Exchange Commission for all outstanding shares of Common
Stock not beneficially owned by such Person (or by its Affiliates or
Associates). Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the "current market price", as defined in Section 11(d)(i)
hereof, of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.
(B) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Any notice 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.
Section 24. Notice of Certain Events.
(A) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or (v)
to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock whichever shall
be the earlier.
(B) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 2. 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:
E-Systems, Inc.
P.O. Box 660248
Dallas, Texas 75266
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Society National Bank
c/o Society Shareholder Services, Inc.
1201 Elm Street, Suite 5050
Dallas, Texas 75270
Attention: Location Manager
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of
the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clauses (i) and (ii) of the first
proviso to Section 23(a) hereof, shall be effective only if there are
Continuing Directors and shall require the concurrence of a majority of
such Continuing Directors), or (iv) to change or supplement the
provisions hereunder in any manner 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); provided, this
Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for
the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of
the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing
Directors) shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including 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 (with, where specifically provided for herein, the concurrence of
the Continuing Directors) in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights
and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; 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, registered holders of the Common Stock).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held
by such court or authority to be invalid, void or unenforceable and the
Board of Directors of the Company determines in its good faith judgment
that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption
set forth in Section 23 hereof shall be reinstated and shall not expire
until the close of business on the tenth day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring a majority of the Board of
Directors of the Company to be Continuing Directors to act is held by
any court of competent jurisdiction or other authority to be invalid,
void or unenforceable, such determination shall then be made by the
Board of Directors of the Company in accordance with applicable law and
the Company's Certificate of Incorporation and By-Laws.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws
of such State applicable to contracts made and to be performed entirely
within such State.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any
of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to
be hereunto affixed and attested, all as of the day and year first
above written.
Attest: E-SYSTEMS, INC.
James M Bolding James W. Crowley
Assistant Secretary Vice President, Secretary
and General Counsel
Attest: SOCIETY NATIONAL BANK
Mark Asbury William D. Robinson
Vice President Vice President
<PAGE>
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
of
E-SYSTEMS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officers of E-Systems, Inc., a corporation
organized and existing under the General Corporation Law of the State
of Delaware, in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on September 28, 1994, adopted
the following resolution creating a series of 50,000 shares of
Preferred Stock designated as Series A Junior Participating Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
its Restated Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 50,000.
Dividends and Distributions.
The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $0.01 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 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, par value
$1.00 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time after
September 28, 1994 (the "Rights Declaration Date") (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 of shares, then in each
such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in
Paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred Stock,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Junior Participating 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 Junior Participating 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 Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to 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 after the Rights Declaration
Date (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 of shares,
then in each such case the number of votes per share to which holders
of shares of Series A Junior Participating 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.
Except as otherwise provided herein or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in
an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including
holders of the Series A Junior Participating Preferred Stock)
with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective
of series, shall have the right to elect two (2) Directors.
During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock
may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that such voting right
shall not be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as
a class, to elect Directors to fill such vacancies, if any,
in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may
be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of
Directors as shall be necessary to permit the election by
them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased
or decreased except by vote of the holders of Preferred Stock
as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A
Junior Participating Preferred Stock.
Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number
of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of special meeting of the
holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of
the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Paragraph (C)(iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called
for a time not earlier than 20 days and not later than 60
days after such order or request or in default of the calling
of such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions
of this Paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the
stockholders.
In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock
shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been
elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of Directors
may (except as provided in Paragraph (C)(ii) of this Section
3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become
vacant. References in this Paragraph (C) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a
class shall terminate, and (z) the number of Directors shall
be such number as may be provided for in the certificate of
incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the
certificate of incorporation or by-laws). Any vacancies in
the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Certain Restrictions.
Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating 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 Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Participating Preferred Stock;
declare or pay dividends on 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 Junior
Participating Preferred Stock, except dividends paid ratably
on the Series A Junior Participating 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;
redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity 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 Junior
Participating Preferred Stock; or
purchase or otherwise acquire for
consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Participating 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.
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.
Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
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 to
be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth
herein.
Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series
A Junior Participating Preferred Stock shall have received an amount
equal to 1,000 times the Exercise Price, 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"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference
by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in
clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior
Participating Preferred Stock and Common Stock, respectively, holders
of Series A Junior Participating Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a
per share basis, respectively.
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
Junior Participating 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.
In the event the Corporation shall at any time after the
Rights Declaration Date (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 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.
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 the shares of Series A Junior Participating Preferred Stock
shall at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter set
forth) equal to 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 after the
Rights Declaration Date (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 of shares, 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 Junior Participating 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.
No Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Amendment. The Restated Certificate of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of
the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or
more of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holders fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this 7th day of October, 1994.
E-SYSTEMS, INC.
Name:
Title:
Attest:
Secretary
<PAGE>
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER OCTOBER 17, 2004 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR 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 SECTION 7(e) OF SUCH AGREEMENT.]
Rights Certificate
E-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 October
7, 1994 (the "Rights Agreement"), between E-Systems, Inc., a Delaware
corporation (the "Company"), and Society National Bank, a national
banking association (the "Rights Agent"), to purchase from the Company
at any time prior to 5:00 P.M. (New York City time) on October 17, 2004
at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-thousandth of a
fully paid, non-assessable share of Series A Junior Participating
Preferred Stock (the "Preferred Stock") of the Company, at a purchase
price of $130.00 per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate
(and the number of shares which may be purchased upon exercise thereof)
set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of September 28, 1994 based on the
Preferred Stock as constituted at such date. The Company reserves the
right to require prior to the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of
any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee
of a person who, after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities,
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, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of one one-thousandths of a share of 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 its
option at a redemption price of $0.01 per Right at any time prior to
the earlier of the close of business on (i) the tenth day following the
Stock Acquisition Date (as such time period may be extended pursuant to
the Rights Agreement), and (ii) the Final Expiration Date. In
addition, the Rights may be exchanged, in whole or in part, for shares
of the Common Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the Company
authorizing any such exchange, and without any further action or any
notice, the Rights (other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable holders to
receive the shares issuable upon such exchange. Under certain
circumstances set forth in the Rights Agreement, the decision to redeem
the Rights shall require the concurrence of a majority of the
Continuing Directors.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
shares of Preferred Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ,
ATTEST: E-SYSTEMS, INC.
____________________ By_______________________
Secretary Title:
Countersigned:
SOCIETY NATIONAL BANK
By______________________
Authorized Signature
<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 transfer 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: ___________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: __________________, 19__ ______________________
Signature
Signature Guaranteed:
<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: E-SYSTEMS, INC.:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and delivered
to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________, 19__
______________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________, 19__ ___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
