As filed with the Securities and Exchange Commission on June 10, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ELXSI Corporation
(Exact name of Registrant as Specified in Its Charter)
Delaware 77-0151523
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(State of Incorporation or Organization) (IRS Employer Identification No.)
4209 Vineland Road, Suite J-1,
Orlando, Florida 32811
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of debt registration of a class of debt
securities and is effective upon filing securities and is become
pursuant to General Instruction A(c)(1) effective simultaneously with
please check the following box |_| the effectiveness of a concurrent
registration statement under the
Securities Act of 1933 pursuant
to General Instruction A(c)(2)
please check the following
box |_|
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
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Item 1. Description of Registrant's Securities to be Registered.
The Board of Directors of ELXSI Corporation (the "Company") has
declared a dividend distribution of one common stock purchase right
(collectively, the "Rights") for each outstanding share of Common Stock, par
value $.001 per share (the "Common Stock"), of the Company to holders of record
of the Common Stock at the opening of business on June 16, 1997 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one share of Common Stock (or in certain circumstances, cash, property, or other
securities of the Company), at a purchase price of $25.00, subject to adjustment
(the "Purchase Price").
The actual terms of the Rights are established under and set forth in a
Rights Agreement, dated as of June 4, 1997 (the "Rights Agreement"), between the
Company and Continental Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent"). A conformed copy of the Rights Agreement (including a form of
the certificate to represent the Rights) is filed herewith as Exhibit 1.1, and
is hereby incorporated herein by reference. The following description of the
Rights is qualified by reference to such Exhibit 1.1. Capitalized terms used but
not otherwise defined herein have meanings ascribed to such terms in the Rights
Agreement.
Initially, the Rights will be evidenced by the certificates
representing shares of Common Stock then outstanding, and no separate Rights
certificates will be distributed. The Rights will separate from the Common
Stock, and become exercisable, at such time (if any) that is the earlier to
occur of (as the case may be, the "Distribution Date"): (i) ten business days
following the first date of public announcement (the "Stock Acquisition Date")
that a person or group, together with such person's or group's Affiliates and
Associates (as defined under specified rules of the Securities and Exchange
Commission), has become the beneficial owner of 15% (35% in the case of the
Milley Group Members (as hereinafter defined)) or more of the Common Stock (such
a person or group, an "Acquiring Person"), and (ii) ten business days (or such
later date as is determined by the Board of Directors, or if there previously
has been an Adverse Change of Control, by a majority of the Continuing Directors
(as such terms are hereinafter defined)) after the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15% (35% in the case of the Milley Group Members) or more of the Common
Stock. The "Milley Group Members" are (a) Alexander M. Milley (the Chairman of
the Board, President and Chief Executive Officer of the Company, (b) his wife
and children, (c) any guardian, representative, executor, estate, administrator
or agent of Mr. Milley, his wife or children (but only with respect to any
shares of Common Stock beneficially owned by any such guardian, representative,
executor, estate, administrator or agent in its capacity as such), and (d)
provided that Mr. Milley has voting power with respect to any shares of Common
Stock held by any of the following: (x) any trust for the benefit of Mr. Milley,
his wife or children, and (y) any corporation, partnership, limited liability
company or other entity which Mr. Milley, his wife or any of his children may
control. At the date hereof, the Milley Group Members, together with the
Affiliates And associates thereof that own Common Stock, beneficially own
approximately 23.3% of the outstanding Common Stock. For purposes of the
foregoing, "beneficial ownership" is determined as provided under the Rights
Agreement.
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Until the Distribution Date: (i) the Rights will be evidenced only by
the Common Stock certificates and will be transferred with such Common Stock
certificates, (ii) new Common Stock certificates issued on or after the Record
Date will contain a legend indicating that such certificates also represent
Rights and incorporating by reference the terms of the Rights Agreement, and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
The Rights will not be exercisable until the Distribution Date (if any)
and will expire at the close of business on June 15, 2007, unless earlier
redeemed or exchanged by the Company as described below.
As soon as practicable after any Distribution Date, separate
certificates representing Rights, in the form of Exhibit A to the Rights
Agreement ("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 provided by the Rights Agreement or determined by the Board
of Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a person or group becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
shares of Common Stock (or in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right. Notwithstanding the foregoing, following the occurrence of such an
event or any other Triggering Event (as defined below), all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any of its Affiliates or
Associates will be null and void.
After any Stock Acquisition Date, in the event that: (i) the Company
consolidates or merges with any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding shares of Common
Stock of the Company are changed into or exchanged for stock, other securities
of the other person, or cash or any other property, and the Company is the
surviving corporation, or (iii) 50% or more of the Company's assets or earning
power is sold or otherwise transferred, the Rights Agreements requires that
proper provisions be made so that each holder of a Right shall thereafter have
the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right. The events
set forth in this paragraph and the immediately preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock or
other securities, cash or property issuable, upon exercise of the Rights are
subject to customary adjustments from time to time to prevent dilution in the
event of certain changes in the shares of the Company. With certain exceptions,
no adjustment in the Purchase Price will be required until cumulative
adjustments amount to an increase or decrease of at least 1% in the Purchase
Price.
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In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (subject to adjustment), at any time before
the earlier of the close of business on: (i) the tenth business day following
any Stock Acquisition Date or (ii) the expiration date of the Rights. However,
if the authorization to redeem the Rights occurs on or after the date that there
shall have been a change in a majority of the Board of Directors of the Company
as a result of a proxy or consent solicitation and a person or group that was 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 group (or any of its Affiliates or
Associates) has taken or intends to take or may consider taking actions that
would result in such person or group becoming an Acquiring Person or cause the
occurrence of a Triggering Event (the existence of these circumstances being
referred to as an "Adverse Change of Control"), then the redemption of the
Rights will require the approval of a majority of the Continuing Directors.
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 $.001 redemption price.
"Continuing Director" means: (i) any member of the Board of Directors
of the Company who, while a member of such Board, 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 such
Board prior to the Record Date, or (ii) any person who subsequently becomes a
member of such Board who, while a member of such Board, 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 of Directors of the Company is
recommended or approved by a majority of the Continuing Directors.
At any time after a person or group becomes an Acquiring Person (but
before such Acquiring Person owns 50% or more of the Common Stock), the Board of
Directors of the Company may exchange the then outstanding and exercisable
Rights (other than those owned by an Acquiring Person, or any of its Affiliates
or Associates, that have become null and void as referenced hereinabove), for
shares of Common Stock, each Right being exchangeable for one share of Common
Stock, subject to adjustment.
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.
Any of the provisions of the Rights Agreement may be amended or
supplemented by the Board of Directors of the Company (without the approval of
holders of Rights) prior to the earliest to occur of (i) a Distribution Date,
(ii) a Triggering Event or (iii) an Adverse Change of Control. After the first
to occur of such events, the provisions of the Rights Agreement may be amended
or supplement with the approval of a majority of the Continuing Directors (and
without the approval of holders of Rights): (x) in any manner that will not
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or its Affiliates or Associates), or (y) in order to cure any ambiguity
or to correct or supplement any provision that a majority of the Continuing
Directors may deem to be defective or inconsistent with other provisions of the
Rights Agreement, or (z) to shorten or lengthen any time period under the Rights
Agreement; however, the Rights Agreement
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<PAGE>
cannot be so supplemented or amended to (A) change the redemption price,
accelerate the expiration date of the Rights, change the Purchase Price, or
change the number of shares of Common Stock for which a Right is exercisable, or
(B) lengthen (1) the time period when the Rights may be redeemed at a time when
the Rights are not then redeemable, or (2) 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 (other than an Acquiring
Person or its Affiliates or Associates).
The Rights may have certain "anti-takeover" effects, inasmuch as they
may operate to cause substantial dilution to a person or group (and the
Affiliates and Associates thereof) that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being acquired. The
Rights may thus lessen the likelihood that a takeover attempt will be made with
respect to the Company. However, in the opinion of the Company's management, the
Rights will help ensure that the Company's stockholders receive fair and equal
treatment in the event of any proposed takeover of the Company. The execution of
the Rights Agreement and distribution of the Rights by the Company are not in
response to any specific takeover threat or proposal, but are precautions being
taken in order to help protect these interests of the Company's stockholders.
Item 2. Exhibits.
Exhibit Number Description of Exhibit
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4.17 Rights Agreement, dated as of June 4, 1997, between
ELXSI Corporation and Continental Stock Transfer &
Trust Company, as Rights Agent (including as Exhibit
B thereto the Form of Rights
Certificate).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
ELXSI CORPORATION
Dated: June 10, 1997 By: /s/ Alexander M. Milley
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Alexander M. Milley
President
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Exhibit 4.17
CONFORMED COPY
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ELXSI Corporation
and
Continental Stock Transfer & Trust Company
RIGHTS AGREEMENT
Dated as of June 4, 1997
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<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions............................................ 1
SECTION 2. Appointment of Rights Agent.................................... 4
SECTION 3. Issue of Right Certificates.................................... 5
SECTION 4. Form of Right Certificates..................................... 6
SECTION 5. Countersignature and Registration.............................. 8
SECTION 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates................... 8
SECTION 7. Exercise of Rights; Purchase Price;
Expiration Date of ............................................. 9
SECTION 8. Cancellation and Destruction of Right Certificates............. 11
SECTION 9. Reservation and Availability of Shares of Capital Stock....... 11
SECTION 10. Common Stock Record Date...................................... 12
SECTION 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights..................................... 13
SECTION 12. Certificate of Adjusted Purchase Price or
Number of Shares .............................................. 20
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power............................................... 20
SECTION 14. Fractional Rights and Fractional Shares........................ 23
SECTION 15. Rights of Action............................................... 24
SECTION 16. Agreement of Right Holders..................................... 24
SECTION 17. Right Certificate Holder Not Deemed a Stockholder.............. 25
SECTION 18. Concerning the Rights Agent.................................... 25
SECTION 19. Merger or Consolidation or Change of Name of
Rights Agent .................................................. 26
SECTION 20. Duties of Rights Agent......................................... 26
SECTION 21. Change of Rights Agent......................................... 28
SECTION 22. Issuance of New Right Certificates............................. 29
SECTION 23. Redemption and Termination..................................... 29
SECTION 24. Exchange....................................................... 30
SECTION 25. Notice of Certain Events....................................... 31
SECTION 26. Notices........................................................ 32
SECTION 27. Supplements and Amendments..................................... 33
SECTION 28. Successors..................................................... 33
SECTION 29. Determinations and Actions by the Board of Directors........... 33
SECTION 30. Benefits of this Agreement..................................... 34
SECTION 31. Severability................................................... 34
SECTION 32. Governing Law.................................................. 34
SECTION 33. Counterparts................................................... 34
SECTION 34. Descriptive Headings........................................... 35
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of June 4, 1997 (as the same may be
modified, amended, supplemented and/or restated from time to time, this
"Agreement"), between ELXSI Corporation, a Delaware corporation (the "Company"),
and Continental Stock Transfer & Trust Company, a New York corporation, as
Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one Right for each share of Common Stock of the Company
outstanding as of the Opening of Business (as such terms are hereinafter
defined) on June 16, 1997 (the "Record Date"), and has further authorized (i)
the issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Opening of Business on the Record Date and the
earliest of the Distribution Date (as such term is defined in Section 3), the
Redemption Date and the Final Expiration Date (as such terms are defined in
Section 7) and (ii) in certain circumstances provided in Section 22, the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Distribution Date and the earlier of the
Redemption Date and the Final Expiration Date, each Right initially representing
the right to purchase one share of Common Stock of the Company, upon the terms
and subject to the conditions herein set forth (the "Rights").
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, and intending to be legally bound hereby, 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) any Exempt Person (as hereinafter defined) or (ii) any
Milley Group Member, if and so long as all Milley Group Members, together with
their Affiliates and Associates, are not the Beneficial Owners of 35% or more of
the shares of Common Stock then outstanding. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition of
beneficial ownership of shares of Common Stock by the Company that, by reducing
the number of shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) outstanding, increases the percentage
of shares of Common Stock beneficially owned by such Person (together with all
Affiliates and Associates of such Person) to 15% or more (or, in the case of the
Milley Group Members, 35% or more) of the shares of Common Stock then
outstanding; provided, however, that if any Person (other than Exempt Persons)
(together with all Affiliates and Associates of such Person) shall become the
Beneficial Owner of 15% or more (or, in the case of the Milley Group Members,
35% or more)] of the shares of Common Stock then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Common Stock of the
Company, then such Person shall be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person" as defined pursuant
to the first sentence of this paragraph (a), has become such inadvertently, and
such Person divests as promptly as
<PAGE>
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not, solely as a result
of such inadvertent acquisition, be deemed to be an "Acquiring Person" for any
purpose of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as such rule is in effect on the Record Date.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own," and shall be deemed to have
"beneficial ownership" of, any securities:
(i) that such Person, or any of such Person's
Affiliates or Associates, directly or indirectly has
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own (1)
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange, (2) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event,
or (3) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event, if such Rights were
acquired by such Person or such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any of the Rights heretofore
specified in this clause (3); or
(B) the right to vote or otherwise has "beneficial
ownership" (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, pursuant to this
subparagraph (B), any security as a result of any agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D
or Schedule 13G under the Exchange Act (or any comparable or
successor report); or
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(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or 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 provision in subparagraph
(i)(B) of this subsection (c)) or disposing of any securities of the
Company;
provided, however, that nothing in this subsection (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" when used with reference to the Company
shall mean the shares of Common Stock, par value $0.001 per share, of the
Company. "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest
voting power of such Person or, if such Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such first-mentioned
Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3.
(h) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company or (iv) any entity holding shares of Common Stock
for or pursuant to the terms of any such plan.
(i) "Final Expiration Date" shall have the meaning set
forth in Section 7.
(j) "Milley Group Member" shall mean (i) Alexander M. Milley,
(ii) the spouse of Alexander M. Milley or any of his issue, (iii) any guardian,
representative, executor, estate, administrator or agent of Alexander M. Milley,
his spouse or issue, but only with respect to any shares of Common Stock
beneficially owned by any such guardian, representative, executor, estate,
administrator or agent in its capacity as such, (iv) any trust for the benefit
of Alexander M. Milley, his spouse or issue, (v) any corporation, partnership,
limited liability company or other entity which Alexander M. Milley, his spouse
or any of his issue may control (within the meaning of Rule 12b-2 of the General
Rules and Regulations promulgated under the Exchange Act) (so long as in any
such case set forth in the foregoing clauses (iv) and (v), Alexander M. Milley
has sole or shared voting power with respect to any
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shares of Common Stock held by the subject trust, corporation, limited liability
company or other entity). For purposes of clarification: (A) at the date hereof
the Milley Group Members and the Affiliates and Associates thereof that
beneficially own Common Stock are: Alexander M. Milley (individually); Eliot
Kirkland L.L.C., a Delaware limited liability company; Cadmus Corporation, a
Massachusetts corporation; and ELX Limited Partnership, a Delaware limited
partnership; and (B) The Alexander M. Milley Irrevocable Trust I is not a Milley
Group Member (or an Affiliate or Associate thereof), by operation of the
parenthetical condition set forth in the foregoing sentence.
(k) "Opening of Business" on any given date shall mean 9:00
A.M., New York City time, on such date; provided, however, that if such date is
not a Business Day, it shall mean the Close of Business on the immediately
preceding Business Day.
(l) "Person" shall mean any individual, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(m) "Redemption Date" shall have the meaning set forth in
Section 7.
(n) "Section 11(a)(ii) Event" shall mean the event
described in Section 11(a)(ii).
(o) Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(p) "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.
(q) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, directly or indirectly, by such Person.
(r) "Triggering Event" shall mean any Section 11(a)(ii)
Event or Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent. In the event
the Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
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SECTION 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth Business Day after the Stock Acquisition Date
or (ii) the Close of Business on the tenth Business Day (or such later date as
the Board of Directors shall determine, provided that if such determination
occurs on or after the date of an Adverse Change in Control, then such date may
be extended only if there are Continuing Directors in office and such extension
is authorized by a majority of such Continuing Directors) after the date that a
tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-4(a) of the General
Rules and Regulations under the Exchange Act, the consummation of which would
result in beneficial ownership by a Person (other than an Exempt Person) of 15%
or more (or, in the case of a Milley Group Member, 35% or more) of the
outstanding shares of Common Stock (including any such date that is after the
date of this Agreement and prior to the issuance of the Rights) (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 shares of Common Stock registered in the
names of the holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of shares of Common Stock. The Company shall give the Rights Agent
written notice of the Distribution Date as promptly as practicable thereafter.
As soon as practicable after the Distribution Date and receipt of written notice
of the Distribution Date from the Company, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to each record holder of shares of
Common Stock as of the Close of Business on the Distribution Date, or, with
respect to shares of Common Stock so issued on or after the Distribution Date
(unless otherwise provided with respect thereto as aforesaid), to the record
holder of such shares of Common Stock on the date of issuance, at the address of
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A, evidencing one Right for each share of
Common Stock so held, subject to adjustments 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(i) hereof, at the time of distribution of the Right
Certificates, the Company may make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Right 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 Right 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 B (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of shares of Common Stock as of the
Opening of Business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for shares of Common
Stock outstanding as of the Opening of Business on the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for shares
of Common Stock registered in the names of the holders thereof (together with a
copy of the Summary of Rights). Until the earlier of the Distribution Date or
Final Expiration Date, the surrender for transfer of any certificate for shares
of Common Stock outstanding on the Opening of Business on the Record Date, with
or without a copy of the Summary of Rights
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attached thereto, shall also constitute the transfer of the Rights associated
with the shares of Common Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or delivered from the
Company's treasury) after the Opening of Business on the Record Date but prior
to the earlier of the Distribution Date or Final Expiration Date, or in certain
circumstances provided in Section 22, after the Distribution Date. Certificates
for shares of Common Stock issued after the Opening of Business on the Record
Date but prior to the earlier of the Distribution Date or the Final Expiration
Date (including, without limitation, reacquired shares of Common Stock referred
to in the last sentence of this paragraph (c)) shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in a Rights Agreement between ELXSI
Corporation (the "Company") and Continental
Stock Transfer & Trust Company, as Rights
Agent, dated as of June 4, 1997 (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal
executive offices of the Company. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights will be
evidenced by separate certificates and will
no longer be evidenced by this certificate.
The Company will mail to the holder of this
certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without
charge promptly following receipt of a
written request therefor. Under certain
circumstances, Rights beneficially owned by
Acquiring Persons or Associates or
Affiliates of Acquiring Persons (as such
terms are defined in the Rights Agreement)
and any subsequent holder of such Rights may
become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the shares of Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of shares
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 shares of Common Stock represented by such
certificates. In the event that the Company purchases or acquires any shares of
Common Stock after the Opening of Business on the Record Date but prior to the
earlier of the Distribution Date or the Final Expiration Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the shares of Common Stock which are no longer outstanding.
SECTION 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit A and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company
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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 any
national securities association on whose interdealer quotation system the Rights
may from time to time be authorized for quotation, or to conform to usage. The
Right Certificates shall be in a machine printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the provisions of
Section 22, the Right Certificates that are issued in respect of shares of
Common Stock that were issued and outstanding as of the Opening of Business on
the Record Date shall be dated as of the Record Date, and all Right Certificates
that are issued in respect of other shares of Common Stock shall be dated as of
the respective dates of issuance of such shares of Common Stock, and in either
case on their faces shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the price set forth
therein (such purchase price per one share of Common Stock, the "Purchase
Price"), but the number and type of securities purchasable upon exercise of each
Right and the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or
Section 22 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 any Associate or Affiliate of an Acquiring Person) which
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or any Associate or Affiliate of an Acquiring
Person) 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 (or any Associate
or Affiliate of such Acquiring Person) to holders of equity interests in such
Acquiring Person (or of such Associate or Affiliate) or to any Person with whom
the Acquiring Person has any agreement, arrangement or understanding regarding
the transferred Rights, or (B) a transfer that the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which has
as a primary purpose or effect the avoidance of Section 7(e) or Section 11
hereof, and any Right Certificate issued pursuant to Section 6 or Section 11
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an
Acquiring Person. This Right Certificate and
the Rights represented hereby may become
null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
The absence of the foregoing legend on any Right Certificate shall in no way
affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended and shall
supply the Rights Agent with such legended Right Certificates.
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<PAGE>
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, of the
Company, either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this 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 the office of the Rights Agent designated for such
purposes, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights as evidenced on the face
of each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and Section
14, at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities or other assets, as the case may be)
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged, with the
form of assignment and certificate appropriately executed, at the office 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 Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right 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), Section 11 and Section 14, countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment by the holder of a Right
Certificate of a sum sufficient to cover any tax or governmental charge that may
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<PAGE>
be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e), the registered holder of any Right
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))
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price with
respect to the total number of shares of Common Stock (or other securities, cash
or other assets, as the case may be) as to which the Rights are exercised, at or
prior to the earliest of (i) the Close of Business on June 15, 2007 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one share of Common Stock
pursuant to the exercise of a Right shall initially be $25.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 and shall be
payable in lawful money of the United States of America, subject to paragraph
(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the one share of Common Stock
(or other securities or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9(e) (as determined by the
Rights Agent), the Rights Agent shall, subject to Section 20(j), thereupon
promptly (i) (A) requisition from any transfer agent for such shares (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Common 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 Common Stock issuable upon exercise of the Rights hereunder
with a depository agent, requisition from the depository agent depository
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common Stock represented
by such receipts shall be deposited by the transfer agent with the depository
agent) and the Company hereby directs the
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<PAGE>
depository agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
interests in shares in accordance with Section 14, (iii) after receipt of such
certificates or depository receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificates registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate. The payment of the Purchase Price (as such amount may
be reduced pursuant to Section 11(a)(iii)) may be made in cash or by certified
or bank check or money order payable to the order of the Company. In the event
the Company is obligated to issue other securities (including shares of Common
Stock) of the Company or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities or 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 Common Stock would be issued.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(e) Notwithstanding anything to the contrary in this
Agreement, from and after the first occurrence of any Triggering Event, any
Rights beneficially owned by (i) any Acquiring Person (or any Associate or
Affiliate of an Acquiring Person), (ii) a transferee of an Acquiring Person (or
any Associate or Affiliate of an Acquiring Person) which becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) 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 (or any Associate or Affiliate of such
Acquiring Person) to holders of equity interests in such Acquiring Person (or of
such Associate or Affiliate) or to any Person with whom the Acquiring Person has
any agreement, arrangement or understanding regarding the transferred Rights, or
(B) a transfer that the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or such Section 4(b)
with respect to any Acquiring Person or an Associate or Affiliate of an
Acquiring Person or their transferees.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to
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<PAGE>
a registered holder upon the occurrence of any purported transfer or exercise
unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set forth
on the reverse side of the Right Certificate surrendered for such assignment or
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 Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
SECTION 9. Reservation and Availability of shares of Capital Stock. (a)
Subject to the Company's rights under Section 11(a)(iii) hereof to otherwise
fulfill its obligations hereunder, the Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
shares of Common Stock or any shares of Common Stock held in its treasury, the
number of shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Rights pursuant to the terms of this Agreement;
provided, however, that such action need not be taken with respect to shares of
Common Stock (or other securities) issuable upon exercise of the Rights until
after such time as the Rights become exercisable.
(b) So long as the shares of Common Stock issuable upon the
exercise of Rights may be listed on any national securities exchange or
authorized for quotation on any interdealer quotation system of any national
securities association, 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 or quoted on such system upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as is practicable following the earliest date after the first occurrence of
a Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Sections
11(a)(ii) (or Section 11(a)(iii))and 13 hereof, or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock or other 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 Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for such securities or
(B) the Final Expiration Date. The Company will also take such action
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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 paragraph, 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 each case
with simultaneous written notice to the Rights Agent. 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 or the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective. The Rights Agent may assume that any Right exercised is permitted to
be exercised under applicable law and shall have no liability for acting in
reliance upon such assumption.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock 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 shares.
(e) The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any shares of Common Stock upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax that may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of certificates
or depository receipts for the shares of Common Stock in a name other than that
of, the registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or depository receipts for
the shares of Common Stock upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
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. Common Stock Record Date. Each person in whose name any
certificate for a number of shares of Common Stock 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 Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Stock 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 Common Stock transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate, as such, shall not be entitled to
any rights of a stockholder of
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the Company with respect to the 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 of Shares or Number of
Rights. The Purchase Price, the number and kind of securities covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the shares of Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding shares of
Common Stock, (C) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (D) issue any shares of its capital stock in
a reclassification of the shares of Common 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), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock that, if such
Right had been exercised immediately prior to such date and at a time when the
Common Stock (or other capital stock, as the case may be) transfer books of the
Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the securities of the Company issuable upon the exercise thereof. If an event
occurs that would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event any Person, at any time after the date of
this Agreement, is or becomes an Acquiring Person, then, promptly following the
occurrence of such Section 11(a)(ii) Event, proper provision shall be made so
that each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
shares of Common Stock as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of shared of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of the 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 per share
market price of the shares of Common Stock (determined pursuant to Section
11(d)) on the date of the occurrence of the Section 11(a)(ii) Event (such number
of shares is herein called the "Adjustment Shares"); provided, however, that the
Purchase Price and number of Adjustment Shares shall be further adjusted
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as provided in this Agreement to reflect any event occurring after the date of
such first occurrence.
(iii) In the event that, after the date of the occurrence of
such a Section 11(a)(ii) Event, the number of shares of Common Stock which is
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights, the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares in accordance
with Section 11(a)(ii) issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares upon exercise of the Rights, (1) cash, (2) a reduction in
the Purchase Price, (3) shares of Common Stock of the same or different class or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of common stock which the Board of Directors of the Company
has deemed to have substantially the same economic value as shares of Common
Stock (such shares or units of shares of common stock are referred to herein 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, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) 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. If the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, 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, as the case
may be, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action should be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional securities
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
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the shares of Common Stock shall be the
current per share market price per share of Common Stock (as defined in Section
11(d))
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on the Section 11(a)(ii) Trigger Date, and the value of any "common stock
equivalent" shall be deemed to have the same value as the shares of Common Stock
on such date.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Common Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Stock, or shares
having the same rights as Common Stock ("equivalent common stock"), or
securities convertible into Common Stock or equivalent common stock at a price
per share of Common Stock or equivalent common stock, or having a conversion
price per share, if a security convertible into Common Stock or equivalent
common stock, less than the current per share market price of Common Stock (as
determined pursuant to Section 11(d)) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock and/or
equivalent common 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 Common Stock outstanding on such record date plus the number of
additional shares of Common Stock and/or equivalent common stock to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by 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 Rights. Shares of Common 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 that would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Common 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 or
assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company or a dividend payable in Common Stock but
including a dividend payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)), 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 per share market price of
the Common Stock (as determined pursuant to Section 11(d)) 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 and shall be binding on the Rights Agent and the
holders of the Rights) 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 Common
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Stock and the denominator of which shall be such current per share market price
of the Common Stock (as determined pursuant to Section 11(d)). Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the "current per share
market price" of the shares of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such shares of Common Stock
for the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market price" of
shares of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such shares of Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current per share market price of the shares of
Common Stock is determined during a period following the announcement by the
issuer of such shares of Common Stock of (1) a dividend or distribution on such
shares of Common Stock payable in such shares of Common Stock or securities
convertible into such shares of Common Stock (other than the Rights), or (2) any
subdivision, combination or reclassification of such shares of Common Stock, and
prior to the expiration of thirty (30) Trading Days, or ten (10) Trading Days,
as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex- dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the shares of Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the shares of
Common Stock, the fair value of the shares of Common Stock on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the shares of Common Stock are not publicly held or not so
listed or traded, "current per share market price" shall mean the fair value per
share as
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determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(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 1% in the Purchase Price; provided,
however, that any adjustments that by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one ten-thousandth of a share of Common
Stock. 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 Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Common 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 shares of Common 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
shares of Common Stock (calculated to the nearest one ten- thousandth) obtained
by (i) multiplying (x) the number of shares of Common Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Common Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of shares of Common 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)
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obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
on such record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and 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 Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of shares of Common Stock that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock (or fractions thereof) at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their
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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 Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than
the current market price, (iii) issuance wholly for cash of shares of Common
Stock or other securities that by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) dividends on shares of Common
Stock payable in shares of Common Stock or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its shares of Common 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 or engage in a share exchange with 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, share
exchange 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, share exchange or sale, the stockholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it shall not, except as permitted by Section 23, Section 24
or Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement 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.
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(q) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date consolidate with, or merge
with or into, any other Person for the primary purpose of a change of domicile
of the Company, and, in connection with such consolidation or merger, all of the
outstanding shares of Common Stock shall be changed into or exchanged for shares
of Common Stock of the surviving corporation of such consolidation or merger
(the "Surviving Corporation"), then proper provision shall be made so that
Rights shall be associated with each share of Common Stock of the Surviving
Corporation, except as provided in Section 7(e) hereof, such that the number of
Rights associated with each share of Common Stock of the Surviving Corporation
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock of the Surviving Corporation which the shares of Common Stock were changed
into or exchanged for pursuant to the consolidation or merger. Following such a
consolidation or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be references to the Surviving
Corporation.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 or 13, 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 shares of Common
Stock a copy of such certificate and (c) mail a brief summary thereof to each
holder of record of a Right Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25. The Rights Agent shall be fully protected in relying
on such certificate and on any adjustment contained therein and shall not be
deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event 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 engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
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 50% or more 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
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or more transactions each of which complies with Section 11(o) hereof), then,
and in each such case proper provision shall be made so that
(i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of call, rights of first
refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right was 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 Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the number of shares of Common Stock for which a Right was
exercisable immediately prior to such first occurrence of a Section
11(a)(ii) Event) and (2) dividing that product (such product 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 50% of the current per share market price of the shares of Common
Stock of such Principal Party (determined pursuant to Section 11(d)) 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 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.
If, in the case of a transaction of the kind described in clause (z) of the
first sentence of this Section 13(a), the Person or Persons to whom assets or
earning power are sold or otherwise transferred are individuals, then the
preceding sentences of this Section 13(a) shall be inapplicable, and the Company
shall require as a condition to such sale or transfer that such Person or
Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights Agent and in exchange therefor (without requiring payment by such
holder), cash in the
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amount determined by multiplying the then current Purchase Price by the number
of shares of Common Stock for which a Right is then exercisable.
(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 for or into which shares of Common Stock
of the Company are converted in such share exchange, 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;
(iii) provided, however, that in any such case, (1) if
the shares of Common Stock of such Person are not at such time and have
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 shares of Common
Stock of which are and have 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 shares
of Common Stock 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 shares of Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of common stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, 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 Securities Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdiction as may be necessary or
appropriate; and
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(iii) 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.
(d) In no event shall the Rights Agent have any liability
hereunder in respect of any such Principal Party transactions, including,
without limitation, the propriety thereof. The Rights Agent may rely and be
fully protected in relying upon a certificate of the Company stating that the
provisions of this Section 13 have been fulfilled.
The provisions of this Section 13 shall similarly apply to successive share
exchanges, mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the first 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).
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 Right
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be 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 Common Stock upon exercise of the Rights or to issue certificates that
evidence fractions of shares of Common Stock. In lieu of fractional interests in
shares of Common Stock, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Common Stock. For purposes of this Section 14(b), the current market value of
one share of Common Stock shall be the closing price of a share of
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Common Stock (as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares (except as provided by this Section 14) upon exercise of a Right.
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the shares of 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 Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the 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
Right 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 Section 7(e), shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by
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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. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent such compensation as shall be agreed upon between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom. The provisions of this Section 18(a) shall
survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for shares of Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed by the proper Person or Persons and, where necessary, to be
verified or acknowledged.
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SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to all or
substantially all the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name, and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent may consult with
legal counsel of its selection (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.
(a) 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 or existence of any
Acquiring Person and the determination of "current per share 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 any one of the chairman of the board, the
president, any vice president, the secretary, an assistant secretary or the
treasurer 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.
(b) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
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(c) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(d) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 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 change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable, nor shall the Rights Agent
be responsible for the legality of the terms hereof in its capacity as an
administrative agent.
(e) 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.
(f) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the chairman of the board, the president, any vice president, the
secretary or the treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions.
(g) 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 peculiarly 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.
(h) 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 (other than employees), and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or
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for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(i) 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 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.
(j) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached hereto unless the Rights Agent
shall have actual knowledge that, as executed, such certification is untrue, or
(ii) the non-execution of such certification including, without limitation, any
refusal to honor any otherwise permissible assignment or election by reason of
such non-execution.
The Company agrees to give the Rights Agent prompt written
notice of any event or ownership known to the Company which would prohibit the
exercise or transfer of the Right Certificates.
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 60 days' notice in writing mailed to the Company and to each transfer agent
of the shares of Common Stock by registered or certified mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the shares of Common Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Rights Agent or the holder of record of any Right Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or any state of the United States so long as such corporation is
authorized to do business as a banking institution, is in good standing, is
authorized under such laws to exercise corporate trust powers, and is subject to
supervision or examination by federal or state authority, and has at the time of
its appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary
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for the purpose. Not later than the effective date of any such appointment the
Company shall file notice with the predecessor Rights Agent and each transfer
agent of the shares of Common Stock, and mail a notice thereof in writing to the
holders of record of the Right Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such 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 Right 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, 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 Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right 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
to the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments 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 Business Day following the Stock Acquisition Date
(or, if the Stock Acquisition Date occurred prior to the Record Date, the Close
of Business on the tenth Business Day following such Record Date) or (ii) the
Close of Business on the Final Expiration Date, redeem all, but not less than
all, of the then outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that if
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, and any Person who is or was 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) has taken or
intends to take, or may consider taking, any action that would result in such
Person becoming an Acquiring Person or that would cause the occurrence of a
Triggering Event (the existence of the circumstances described in this proviso
being referred to herein as an "Adverse Change of Control"), then the Rights may
be so redeemed only if there are Continuing Directors (as hereinafter defined)
in office and such redemption is authorized by a majority of such Continuing
Directors. Notwithstanding the foregoing, in the event payment of the
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Redemption Price to a holder of Rights would result in the payment of an amount
not equal to $.01 or an integral multiple of $.01, the amount to be paid shall
be rounded upward to the next $.01. "Continuing Director" shall mean (i) any
member of the Board of Directors of the Company who, while such person is a
member of the Board, 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 Record Date,
or (ii) any Person who subsequently becomes a member of the Board who, while
such Person is a member of the Board, 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. 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 set forth in the first sentence of this Section 23(a) has expired.
The Company, may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the current market price per share 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, 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. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the shares of Common Stock. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 and Section 24 hereof and other than in connection with
the purchase of shares of Common Stock prior to the Distribution Date.
SECTION 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock, each Right being exchangeable for one share
of Common Stock, appropriately adjusted to reflect any transaction specified in
Section 11(p) occurring after the date hereof (such number of shares of Common
Stock issuable in exchange for one Right being referred to herein as the
"Exchange Shares"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than any Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.
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(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive the Exchange Shares. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding, or authorized but unissued, to permit
any exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights or shall take
such other action specified in Section 11(a)(iii) hereof.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection (d),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second and third
sentences of Section 11(d) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its shares of Common Stock or to
make any other distribution to the holders of its shares of Common Stock (other
than a regular quarterly cash dividend) or (ii) to offer to the holders of its
shares of Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
shares of Common Stock (other than a reclassification involving only the
subdivision of outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(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 or more transactions, of 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in
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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 Right Certificate,
in accordance with Section 26 hereof, a notice of such proposed action that
shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Common Stock, 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 Common 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 Common Stock, whichever shall be the earlier.
(b) In case a Triggering Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26, 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) or Section 13.
(c) The failure to give notice required by this Section 25 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote on any such action.
SECTION 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
ELXSI Corporation
4209 Vineland Road, Suite J-1
Orlando, Florida 32811
Attention: President
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 Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently
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given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
SECTION 27. Supplements and Amendments. Prior to the earliest of (i)
the Distribution Date, (ii) the occurrence of a Triggering Event or (iii) an
Adverse Change of Control, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including supplements or amendments that may be deemed to affect the interests
of the holders of Right Certificates adversely) without the approval of any
holders of certificates representing shares of Common Stock and associated
Rights. From and after the earliest of (i) the Distribution Date, (ii) the
occurrence of a Triggering Event or (iii) an Adverse Change of Control, the
Company may and the Rights Agent shall, if the Company so directs (upon approval
of a majority of the Continuing Directors then in office), supplement or amend
this Agreement without the approval of any holders of Right Certificates (x) in
any manner that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person, or an Affiliate or Associate of
any such Acquiring Person), or (y) in order to cure any ambiguity or to correct
or supplement any provision contained herein which, in the good faith
determination of a majority of the Continuing Directors then in office, may be
defective or inconsistent with the other provisions contained herein, or (z) to
shorten or lengthen any time period hereunder; provided, however, that from and
after the earliest of (i) the Distribution Date, (ii) the occurrence of a
Triggering Event or (iii) an Adverse Change in Control, this Agreement shall not
be supplemented or amended to (A) change the Redemption Price, accelerate the
Final Expiration Date, change the Purchase Price, or change the number of shares
of Common Stock for which a Right is exercisable, or (B) lengthen (1) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (2) 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 (other than an Acquiring Person, or any
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an officer of the Company or, so long as any Person is an
Acquiring Person hereunder, the Continuing Directors that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of shares of Common Stock.
SECTION 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
SECTION 29. Determinations and Actions by the Board of Directors. 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
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rights and powers specifically granted to the Board (with, where specifically
provided for herein, 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
of Directors of the Company (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 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the shares of Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the shares of Common Stock).
SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language of this Agreement would adversely affect the purpose or effect
of this Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[the remainder of this page is intentionally left blank]
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SECTION 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
ELXSI CORPORATION
Attest: By:/s/ Alexander M. Milley
------------------------------
Name: Alexander M. Milley
Title: President
By:/s/ Thomas R. Druggish
----------------------
Secretary
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, as Rights Agent
Attest: By:/s/ William F. Seegraber
------------------------------
Name: William F. Seegraber
Title: Vice resident
By:/s/ Thomas Jennings
----------------------
Assistant Secretary
-35-
<PAGE>
Exhibit A
[Form of Obverse Side of Right Certificate]
Certificate No. R- ____--___ Rights
NOT EXERCISABLE AFTER JUNE 15, 2007 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
BY 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 RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.]*
Right Certificate
ELXSI Corporation
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated
as of June 4, 1997 (as the same may have been modified, amended, supplemented
and/or restated, the "Rights Agreement"), between ELXSI Corporation, a Delaware
corporation (the "Company"), and Continental Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(New York time) on June 15, 2007 at the office of the Rights Agent designated
for such purpose, or at the office of its successors as Rights Agent, one share
of Common Stock, par value $.001 per share (the "Common Stock"), of the Company,
fully paid and nonassessable (or in certain circumstances, cash, property or
other securities of the Company), at a purchase price of $25.00, subject to
adjustment (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the
amount of Common Stock which may be purchased upon exercise thereof) set forth
above, and the
- --------
* The portion of the legend shall be modified to apply to an Acquiring
Person as applicable, and shall replace the preceding sentence.
<PAGE>
Exhibit A (cont'd)
Purchase Price set forth above, are the number and Purchase Price as of June 16,
1997 based on the shares of Common Stock of the Company as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and the amount
of Common Stock evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, including Triggering Events
(as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate amount
of Common Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.001 per Right (subject to adjustment as provided in the
Rights Agreement).
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the shares of
Common Stock nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
<PAGE>
Exhibit A (cont'd)
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________, _______.
ELXSI CORPORATION
Attest: By:_______________________________
[Title]
By:_________________________
[Title]
Countersigned:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, Rights Agent
By:_________________________
Authorized Officer
<PAGE>
Exhibit A (cont'd)
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates)
FOR VALUE RECEIVED_____________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ___________, ____________
___________________________________
Signature
________________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right 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
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated:____________,______ ,
___________________________________
Signature
<PAGE>
Exhibit A (cont'd)
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
________________________________________________________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: ELXSI Corporation
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the number of shares of Common
Stock (or fractions thereof) issuable upon the exercise of such Rights (or such
other securities of the Company or of any other person which may be issuable
upon exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated:__________, ______
__________________________________
Signature
<PAGE>
Exhibit A (cont'd)
________________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) 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 in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated:__________, ______
__________________________________
Signature
________________________________________________________________________________
NOTICE
The signatures in the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
________________________________________________________________________________
WARNING
In the event the Certificate set forth above in the Assignment and
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of such Acquiring Person (as defined in the
Rights Agreement), and such Assignment or Election to Purchase will not be
honored.
<PAGE>
Exhibit B
ELXSI CORPORATION (the "Company")
Rights Agreement, dated as of June 4, 1997
Summary of Rights
Issuance The Rights are being distributed as a dividend on
each share of Common Stock of the Company
outstanding at the opening of business on June
16, 1997.
Purchase Price Each Right entitles the registered holder
to purchase from the Company one share of Common
Stock at a price of $25.00 per Right (the
"Purchase Price"), subject to adjustment.
Exercisability The Rights detach and become exercisable upon the
earlier of:
(1) ten business days after the first public
announcement that a person or group of
affiliated or associated persons (an
"Acquiring Person") has acquired beneficial
ownership of 15% or more of the Company's
outstanding Common Stock (the "Stock
Acquisition Date"), or
(2) ten business days (or a later date as is
determined by the Board in accordance with
the Rights Agreement) after the commencement
of a tender offer or exchange offer that
would result in a person or group
beneficially owning 15% or more of the
Company's outstanding Common Stock.
Transferability The Rights are not detachable and not separately
transferable from the Company's Common Stock
until they become exercisable.
"Flip-In" Triggering Events If any person becomes an Acquiring Person by
acquiring beneficial ownership of 15% or more of
the Company's Common Stock, each outstanding
Right will "flip in" and become a right to buy at
the Purchase Price that number of shares of
Common Stock of the Company that will have a
market value of two times the Purchase Price.
Notwithstanding the foregoing, all Rights that
are beneficially owned by any Acquiring Person
(and its affiliates and associates) will be null
and void upon the occurrence of a Flip-In
Triggering Event.
<PAGE>
Exhibit B (cont'd)
2
Acquiring Person Exception Alexander M. Milley and other "Milley Group
Members" under the Rights Agreement, such as
family members and affiliated companies, shall
not become Acquiring Persons unless such persons
shall have in the aggregate acquired beneficial
ownership of 35% or more of the Company's Common
Stock (which percentage approximates the Milley
Group Members' current ownership position plus an
additional approximately 12%).
"Flip-Over" Triggering Events (1) the Company is acquired in a merger or other
business combination transaction and the Company
does not survive or the Company merges,
consolidates or engages in a share exchange with
another person and does survive but all or part
of its stock is changed, or (2) 50% or more of
the Company's assets or earning power is sold or
transferred,then each outstanding Right will
"flip over" and become a right to buy at the
Purchase Price that number of shares of Common
Stock of the acquiring company that will have a
market value of two times the Purchase Price.
Redemption At any time until ten days following the Stock
Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of
$.001 per Right. However, if there has been a
change in a majority of the Board as a result of
a proxy contest, and a person who was a
participant in the contest has indicated an
intention to become an Acquiring Person or to
cause a Triggering Event (an "Adverse Change of
Control"), then the redemption of the Rights will
require the approval of a majority of the
"Continuing Directors" of the Company.
Exchange Option After a person becomes an Acquiring Person (but
before such Acquiring Person owns 50% or more of
the outstanding Common Stock), the Company, by
action of a majority of the Continuing Directors
in office at the time, may permit each Right
(other than those owned by an Acquiring Person)
to be exchanged, without payment of the Purchase
Price, for one share of Common Stock. The
aggregate dilutive effect on an Acquiring Person
upon exchange of the Rights is somewhat less than
the dilutive effect of a normal exercise of the
Rights.
<PAGE>
Exhibit B (cont'd)
3
Amendment In general, until the Rights become exercisable
the terms of the Rights Agreement may be amended
or supplemented without the approval of any
holders of the Rights. Amendments of the Rights
Agreement after there has been an Adverse Change
of Control or a Triggering Event will require the
approval of a majority of the Continuing
Directors of the Company and generally may not
"adversely affect" the interests of the holders
of Rights (other than Acquiring Persons and the
affiliates and associates thereof).
Voting The Rights have no voting power.
Dividends The Rights have no rights to dividends.
Term Ten years
Miscellaneous The Rights Agreement provides that the Company
may not enter into any transactions, agreements
or arrangements intended to counteract the
protective provisions of the Rights.
* * *
Dated: June 1997
<PAGE>
