EXHIBIT 4.1
EXECUTION COPY
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MARCH 5, 2003
TABLE OF CONTENTS
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Section 1. Certain Definitions.....................................................................................1
Section 2. Appointment of Rights Agent.............................................................................4
Section 3. Issuance of Right Certificates..........................................................................5
Section 4. Form of Right Certificates..............................................................................6
Section 5. Countersignature and Registration.......................................................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates............................................................7
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights...........................................8
Section 8. Cancellation and Destruction of Right Certificates......................................................9
Section 9. Availability of Shares of Preferred Stock...............................................................9
Section 10. Preferred Stock Record Date...........................................................................10
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights..........................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................................18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power.................................18
Section 14. Fractional Rights and Fractional Shares...............................................................22
Section 15. Rights of Action......................................................................................23
Section 16. Agreement of Right Holders............................................................................23
Section 17. Right Certificate Holder Not Deemed a Stockholder.....................................................24
Section 18. Concerning the Rights Agent...........................................................................24
Section 19. Merger or Consolidation or Change of Name of Rights Agent.............................................24
Section 20. Duties of Rights Agent................................................................................25
Section 21. Change of Rights Agent................................................................................27
Section 22. Issuance of New Right Certificates....................................................................28
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Section 23. Redemption............................................................................................28
Section 24. Exchange..............................................................................................28
Section 25. Notice of Certain Events..............................................................................29
Section 26. Notices...............................................................................................30
Section 27. Supplements and Amendments............................................................................31
Section 28. Successors............................................................................................31
Section 29. Benefits of this Rights Agreement.....................................................................31
Section 30. Determinations and Actions by the Board of Directors..................................................31
Section 31. Severability..........................................................................................32
Section 32. Governing Law.........................................................................................32
Section 33. Counterparts..........................................................................................32
Section 34. Descriptive Headings..................................................................................32
EXHIBITS
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights to Purchase
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INDEX OF DEFINED TERMS
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Acquiring Person....................................1
Affiliate...........................................2
Associate...........................................2
Authorized Officer.................................26
Beneficial Owner....................................2
Beneficial Ownership................................2
beneficially own....................................2
Business Day........................................3
close of business...................................3
Common Stock........................................3
Common Stock equivalents...........................13
Company.............................................1
Current Value......................................13
Distribution Date...................................5
equivalent preferred shares........................14
Exchange Act........................................2
Exchange Ratio.....................................29
Exempt Person.......................................4
Expiration Date.....................................8
Final Expiration Date...............................8
invalidation time..................................12
Nasdaq..............................................4
Original Rights.....................................3
Ownership Statement.................................5
Person..............................................4
Preferred Stock.....................................4
Principal Party....................................20
Purchase Price......................................8
Record Date.........................................1
Redemption Date.....................................8
Redemption Price...................................28
Right...............................................1
Right Certificate...................................5
Rights Agreement....................................1
Section 11(a)(ii) Trigger Date.....................13
Securities Act......................................4
Security...........................................15
Spread.............................................13
Stock Acquisition Date..............................4
Subsidiary..........................................4
Substitution Period................................13
Summary of Rights...................................5
then outstanding....................................2
Trading Day........................................15
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RIGHTS AGREEMENT
Rights Agreement, dated as of March 5, 2003 (as amended,
supplemented or otherwise modified from time to time, the "RIGHTS AGREEMENT" )
between cognizant technology SOLUTIONS corporation, a Delaware corporation (the
"COMPANY"), and AMERICAN STOCK TRANSFER & TRUST COMPANY (the "RIGHTS AGENT").
On March 5, 2003, the Board of Directors of the Company
authorized the execution of this Agreement and the declaration of a dividend of
one preferred share purchase right (a "RIGHT") for each share of Common Stock
(as defined below) of the Company outstanding as of the close of business on
March 17, 2003 (the "RECORD DATE"), with each Right representing the right to
purchase one one-thousandth (subject to adjustment) of a share of Preferred
Stock (as defined below), upon the terms and subject to the conditions herein
set forth, and the issuance of one Right (subject to adjustment as provided
herein) with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are defined below); PROVIDED, HOWEVER, that
Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Rights
Agreement, the following terms have the meaning indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as defined
below) who or which shall be the Beneficial Owner (as defined below) of 15% or
more of the shares of Common Stock then outstanding (as defined below), but
shall not include an Exempt Person (as defined below); PROVIDED, HOWEVER, that
(i) if the Board of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person" has become such
inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (B) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had no
actual knowledge of the consequences of such Beneficial Ownership under this
Rights Agreement) and without any intention of changing or influencing control
of the Company, then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Rights Agreement unless and until
such Person shall have failed to divest itself, as soon as practicable (as
determined in good faith by the Board of Directors of the Company), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer otherwise qualify as an "Acquiring Person" for any
purposes in this Agreement; (ii) if, as of the date hereof or prior to the first
public announcement of the adoption of this Agreement, any Person is or becomes
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, such Person shall not be deemed to be or to become an "Acquiring
Person" unless and until such time as such Person shall (A) thereafter become
the Beneficial Owner of additional shares of Common Stock (other than pursuant
to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock) and (B) upon
becoming the Beneficial Owner of such additional shares of Common Stock referred
to in clause (A), such Person is then the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding; and (iii) no Person shall be deemed an
"Acquiring Person" as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned by such Person
to 15% or more of the shares of Common Stock then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding by reason of such share acquisitions
by the Company referred to in this clause (iii) and thereafter becomes the
Beneficial Owner of any additional shares of Common Stock (other than pursuant
to a dividend or distribution paid or made by the Company on the outstanding
Common Stock or pursuant to a split or subdivision of the outstanding Common
Stock), then such Person shall be deemed to be an "Acquiring Person," unless
upon the consummation of the acquisition of such additional shares of Common
Stock such Person does not beneficially own 15% or more of the shares of Common
Stock then outstanding. The phrase "then outstanding" , when used with reference
to a Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), as in effect on the date of this Rights Agreement.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of, shall
be deemed to have "BENEFICIAL OWNERSHIP" of and shall be deemed to "BENEFICIALLY
OWN" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly,
within the meaning of Rule 13d-3 of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Rights
Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), written or
otherwise, 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, (x) securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (y) securities which
such Person has a right to acquire on the exercise of Rights at any
time prior to the time a Person becomes an Acquiring Person or (z)
securities issuable upon exercise of Rights from and after the time a
Person becomes an Acquiring Person if such Rights were acquired by
such Person or any of such Person's Affiliates or Associates
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prior to the Distribution Date or pursuant to Section 3 or Section 22
hereof (the "ORIGINAL RIGHTS") or pursuant to Section 11(i) or Section
11(n) with respect to an adjustment to the Original Rights; or (B) the
right to vote pursuant to any agreement, arrangement or understanding,
written or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security
by reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities),
written or otherwise, for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to this Section
1(c)(ii)(B)) or disposing of such securities of the Company;
PROVIDED, HOWEVER, that (x) no Person who is an officer, director or employee of
an Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this Section 1(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person; (y) a Person shall not be deemed the Beneficial
Owner of, to have "Beneficial Ownership" of or to beneficially own, shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) held by such Person in trust accounts, managed accounts and
the like, or otherwise held in a fiduciary capacity, that are Beneficially Owned
by third Persons who are not Affiliates or Associates of such Person; and (z)
nothing in this Section 1(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, and then only if such securities continue to be owned
by such person at the expiration of forty days.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New Jersey, the
State of New York or the State in which the principal office of the Rights Agent
is located, are authorized or obligated by law or executive order to close.
(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 Class A common stock, par value $.01 per share, of the Company.
"Common Stock" when used
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with reference to any Person other than the Company shall mean the capital stock
(or, in the case of an unincorporated entity, the equivalent equity interest)
with the greatest voting power of such other Person or, if such other Person is
a subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(g) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a) hereof.
(h) "EXEMPT PERSON" shall mean the Company, any Subsidiary (as
defined below) of the Company, in each case including, without limitation, in
its fiduciary capacity, or any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or of any
Subsidiary of the Company.
(i) "EXPIRATION DATE" shall have the meaning set forth in
Section 7(a).
(j) "FINAL EXPIRATION DATE" shall have the meaning set forth
in Section 7(a).
(k) "NASDAQ" shall mean The Nasdaq Stock Market's National
Market.
(l) "OWNERSHIP STATEMENT" shall have the meaning set forth in
Section 3(a) hereof.
(m) "PERSON" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(n) "PREFERRED STOCK" shall mean the Series A Junior
Participating Preferred Stock, par value $.10 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Rights Agreement as Exhibit A.
(o) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(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) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such or such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
(q) "SUBSIDIARY" of any Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person, and any corporation or other entity that is
otherwise controlled by such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Stock)
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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. 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.
Section 3. ISSUANCE OF RIGHT CERTIFICATES. (a) Until the close
of business on the earlier of (i) the tenth day after the Stock Acquisition Date
or (ii) the tenth Business Day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the intention of
such Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person (other than an Exempt
Person) becoming the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding (the earlier of such dates being herein referred to as
the "DISTRIBUTION DATE;" PROVIDED, HOWEVER, that if either of such dates occurs
after the date of this Agreement and on or prior to the Record Date, then the
Distribution Date shall be the Record Date), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders thereof, or by a current
ownership statement issued with respect to uncertificated shares of Common Stock
in lieu of such a certificate (an "OWNERSHIP STATEMENT"), and not by separate
Right Certificates (as defined below), and (y) the Rights will be transferable
only in connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a "RIGHT CERTIFICATE"), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of 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 to Purchase Shares of Preferred
Stock, in substantially the form of Exhibit C hereto (the "SUMMARY OF RIGHTS"),
by first-class, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to shares of Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
associated with such shares will be evidenced by the share certificate for such
shares of Common Stock registered in the names of the holders thereof together
with the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date), the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock issued or disposed of (including, without limitation, upon disposition of
Common Stock out of treasury stock or issuance or reissuance of Common Stock out
of authorized but unissued shares) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date, or in certain
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circumstances provided in Section 22 hereof, after the Distribution Date.
Certificates issued for Common Stock (including, without limitation, upon
transfer of outstanding Common Stock, disposition of Common Stock out of
treasury stock or issuance or reissuance of Common Stock out of authorized but
unissued shares) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This [certificate] [statement] also evidences and entitles the
holder hereof to certain rights as set forth in a Rights
Agreement between Cognizant Technology Solutions Corporation
and American Stock Transfer & Trust Company, dated as of March
5, 2003, as the same may be amended, supplemented or otherwise
modified from time to time (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
Cognizant Technology Solutions Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this [certificate] [statement].
Cognizant Technology Solutions Corporation will mail to the
holder of this [certificate] [statement] a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights owned by or transferred to any Person
who is or becomes an Acquiring Person (as defined in the
Rights Agreement) and certain transferees thereof will become
null and void and will no longer be transferable.
With respect to such certificates or ownership statements containing the
foregoing legend, until the Distribution Date, the Rights associated with the
Common Stock represented by such certificates or ownership statements shall be
evidenced by such certificates or ownership statements alone, and the surrender
for transfer of any such certificate or the transfer of any shares of Common
Stock represented by such ownership statements, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Rights Agreement or the
rights of any holder of the Rights.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement,
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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 Nasdaq or of
any other stock exchange or automated quotation system on which the Rights may
from time to time be listed, or to conform to usage. Subject to the provisions
of Sections 11 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the Purchase Price (as determined
pursuant to Section 7), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by the Chief Executive
Officer, any of the Vice Presidents or the Treasurer of the Company, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates, or shall have attested the Company's seal
thereon, 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, or who attested the Company's seal thereon,
had not ceased to be such officer of the Company; and any Right Certificate may
be signed on behalf of the Company, and the Company's seal may be attested, 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 an office or agency designated for such purpose,
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 evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of this Rights Agreement, at any time after the close
of business on the Distribution Date, and prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following such time, other
securities, cash or 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
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or agency of the
Rights Agent designated for such purpose. Thereupon the Rights Agent, subject to
the provisions of this Rights Agreement, shall countersign and
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deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Subject to the provisions of this Rights Agreement, at any
time after the Distribution Date and prior to the Expiration Date, upon receipt
by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS. (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-thousandth of a share of
Preferred Stock (or other securities, cash or assets, as the case may be) as to
which the Rights are exercised, at any time which is both after the Distribution
Date and prior to the time (the "EXPIRATION DATE") that is the earliest of (i)
the close of business on March 5, 2013 (the "FINAL EXPIRATION DATE"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"REDEMPTION DATE") or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The purchase price (the "PURCHASE PRICE") shall be
initially $450.00 for each one one-thousandth of a share of Preferred Stock
purchasable upon the exercise of a Right. The Purchase Price and the number of
one one-thousandths of a share of Preferred Stock or other securities or
property to be acquired upon exercise of a Right shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with paragraph (c)
of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the number of shares of Preferred Stock to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 6 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock (or make available if the Rights Agent is the transfer agent
of the Preferred Stock) certificates for the number of shares of Preferred Stock
to be purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests), or (B) requisition from the depositary
agent appointed by the Company depositary receipts representing interests in
such
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number of one one-thousandths of a share of Preferred Stock as are to be
purchased, in which case certificates for the Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary agent
(and the Company hereby directs the depositary agent to comply with such
request), (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the exercisable Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such transfer or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the
Company or the Rights Agent shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of 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 cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy or cause to be destroyed such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. AVAILABILITY OF SHARES OF PREFERRED STOCK. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or any
shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) issuable upon the exercise of Rights may be listed or admitted
to trading on Nasdaq or listed on any other national securities exchange or
quotation system, the Company shall use its reasonable best efforts to
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cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed or admitted to trading on Nasdaq or
listed on any other exchange or quotation system upon official notice of
issuance upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its reasonable best efforts, if then necessary to permit
the issuance of shares of Preferred Stock (and following the time that a Person
first becomes an Acquiring Person, shares of Common Stock and other securities)
upon the exercise of Rights, to register and qualify such shares of Preferred
Stock (and following the time that a Person first becomes an Acquiring Person,
shares of Common Stock and other securities) under the Securities Act and any
applicable state securities or "Blue Sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after such filing and
keep such registration and qualifications effective until the earlier of (x) the
date as of which the Rights are no longer exercisable for such securities and
(y) the Expiration Date. The Company may temporarily suspend, for a period of
time not to exceed ninety (90) days, the exercisability of the Rights in order
to prepare and file a registration statement under the Securities Act and permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this Rights
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification or exemption in such
jurisdiction shall have been obtained and until a registration statement under
the Securities Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) delivered upon exercise of Rights shall, at
the time of delivery of the certificates therefor (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock (or shares of Common Stock or
other securities) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Stock (or shares of Common Stock or other securities) in a name other than that
of, the registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or depositary receipts for
Preferred Stock (or shares of Common Stock or other securities) upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by that holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be
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deemed to have become the holder of record of the shares of Preferred Stock
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes or charges) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which such
transfer books are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
holder of Preferred Stock for which the Rights shall be exercisable, including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES AND NUMBER OF RIGHTS. The Purchase Price, the number of shares of
Preferred Stock or other securities or property purchasable upon exercise of
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred
Stock, (C) combine the outstanding shares of Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of its capital stock
in a reclassification of the shares of Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, as the case may be, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Rights Agreement and except
as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii), in
the event that any Person becomes an Acquiring Person, each holder of a
Right shall thereafter have the right to receive, upon exercise thereof at
a price equal to the Purchase Price in effect immediately prior to such
Person becoming an Acquiring Person, in accordance with the terms of this
Rights Agreement and in lieu of shares of Preferred Stock, such number of
shares of Common Stock (or at the option of the Company, such number of one
one-thousandths of a share of Preferred Stock) as shall equal the result
obtained by (x) multiplying the Purchase Price in effect immediately prior
to such Person becoming an Acquiring Person by the number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the current per share
market price of the Company's Common Stock (determined pursuant to Section
11(d) hereof) on
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the date of the occurrence of such event; PROVIDED, HOWEVER, that the
Purchase Price (as so adjusted) and the number of shares of Common Stock so
receivable upon exercise of a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Rights Agreement to the contrary, however,
from and after the time (the "INVALIDATION TIME") when any Person first
becomes an Acquiring Person, any Rights that are beneficially owned by (x)
any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding, written or otherwise, regarding
the transferred Rights or (II) a transfer that the Board of Directors has
determined is part of a plan, arrangement or understanding, written or
otherwise, which has the purpose or effect of avoiding the provisions of
this paragraph, and subsequent transferees of such Persons, shall be null
and void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Rights Agreement. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the invalidation time,
no Right Certificate shall be issued pursuant to Section 3 or Section 6
hereof that represents Rights that are or have become null and void
pursuant to the provisions of this paragraph, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have
become void pursuant to the provisions of this paragraph shall be
cancelled. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exercised pursuant
to this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions of shares of Preferred
Stock having an aggregate current market value equal to the current per
share market price of a share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued (and unreserved) to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii), the Board
of Directors shall, with respect to such deficiency, to the extent
permitted by applicable law and any material agreements then in effect to
which the Company is a party (A) determine the excess of (x) the value of
the shares of Common Stock issuable upon the exercise of a Right in
accordance with the foregoing subparagraph (ii) (the "CURRENT VALUE") over
(y) the then-current Purchase Price multiplied by the number of one
one-thousandths of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring Person became
such (such excess, the "SPREAD"), and (B) with respect to each Right (other
than Rights which have become void pursuant to Section 11(a)(ii)), make
adequate provision to substitute for the shares of Common Stock issuable in
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accordance with subparagraph (ii) upon exercise of the Right and payment of
the applicable Purchase Price, (1) cash, (2) a reduction in such Purchase
Price, (3) shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the
same value as the shares of Common Stock (such shares of preferred stock
and shares or fractions of shares of preferred stock are hereinafter
referred to as "COMMON STOCK EQUIVALENTS")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to
the Current Value (less the amount of any reduction in such Purchase
Price), where such aggregate value has been determined by the Board of
Directors upon the advice of a nationally recognized investment banking
firm selected in good faith by the Board of Directors; PROVIDED, HOWEVER,
if the Company shall not make adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the date that the
Acquiring Person became such (the "SECTION 11(a)(ii) TRIGGER DATE"), then
the Company shall be obligated to deliver, to the extent permitted by
applicable law and any material agreements then in effect to which the
Company is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the
extent available), and then, if necessary, such number or fractions of
shares of Preferred Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
If, within the thirty (30) day period referred to above, the Board of
Directors shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, then, if the Board of Directors so elects,
such thirty (30) day period may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization
of such additional shares (such thirty (30) day period, as it may be
extended, is hereinafter called the "SUBSTITUTION PERIOD"). To the extent
that the Company determines that some action need be taken pursuant to the
second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of
this Section 11(a)(iii) hereof, that such action shall apply uniformly to
all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such second sentence and to determine
the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the shares of Common Stock shall be the current
per share market price (as determined pursuant to Section 11(d)(i)) on the
Section 11(a)(ii) Trigger Date and the per share or fractional value of any
Common Stock equivalent shall be deemed to equal the current per share
market price of the Common Stock. The Board of Directors of the Company
may, but shall not be required to, establish procedures to allocate the
right to receive shares of
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Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the Preferred Stock ("EQUIVALENT PREFERRED SHARES")) or
securities convertible into Preferred Stock or equivalent preferred shares at a
price per share of Preferred Stock or equivalent preferred shares (or having a
conversion price per share, if a security convertible into shares of Preferred
Stock or equivalent preferred shares) less than the then-current per share
market price of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of shares of Preferred Stock and
equivalent preferred shares which the aggregate offering price of the total
number of such shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be the number of shares
of Preferred Stock and equivalent preferred shares outstanding on such record
date plus the number of additional shares of Preferred Stock and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. 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 which shall be
conclusive for all purposes. Shares of Preferred Stock and equivalent preferred
shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then-current per share market price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes) of the portion of such assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock,
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and the denominator of which shall be such current per share market price
of the Preferred Stock (determined pursuant to Section 11(d) hereof); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) Except as otherwise provided herein, for the purpose
of any computation hereunder, the "current per share market price" of any
security (a "SECURITY" for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as defined below) immediately
prior to but not including such date; PROVIDED, HOWEVER, that in the event that
the current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for 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 by (w) the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, Inc. or (x) if the Security
is not listed or admitted to trading on the New York Stock Exchange, Inc., as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if (y) the Security is not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by Nasdaq or such other system then in
use, or, (z) if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. The term "TRADING DAY" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market price" of
the Preferred Stock shall be determined in accordance with the method set
forth in Section 11(d)(i). If the Preferred Stock is not publicly traded
but the Common Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be conclusively deemed to be the
current per share market price of the Common Stock, as determined pursuant
to Section 11(d)(i), multiplied by one thousand (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof). If neither the Common Stock nor the Preferred Stock
is publicly traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors of
the
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Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments not required to be
made by reason of this Section 11(e) 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 Preferred Stock or share of Common Stock or other share or security as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the nearest one
ten-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x)
the number of one one-thousandths of a share of Preferred Stock purchasable upon
the exercise of a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to
adjust the number of Rights, in substitution for any adjustment in the number of
one one-thousandths of a share of Preferred Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price
-16-
in effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
may, as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled as a result of
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-thousandths of a share of Preferred Stock which 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 shares of
Preferred Stock or other shares of capital stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares 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 Preferred Stock, Common Stock or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Stock,
Common Stock or other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, the Company shall be entitled to make such adjustments in the Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred Stock,
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issuance (wholly for cash) of any shares of Preferred Stock at less than the
current market price, issuance (wholly for cash) of Preferred Stock or
securities which by their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock payable in shares of Preferred
Stock or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) Notwithstanding anything in this Rights Agreement to the
contrary, in the event that at any time after the date of this Rights Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of a dividend payable in Common
Stock) into a greater or lesser number of shares of Common Stock, then in any
such case, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event. The adjustments provided for in this Section 11(n) shall be made
successively (but without duplication) whenever such a dividend is declared or
paid or such subdivision, combination or consolidation is effected.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Stock
or the Preferred Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof (if so required under Section 25 hereof). The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNINGS POWER. (a) In the event, directly or indirectly, at any time
after any Person has become an Acquiring Person, (i) the Company shall merge
with and into any other Person, (ii) any Person shall consolidate with the
Company, or any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell or
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otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating to
50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more of
its wholly-owned Subsidiaries), then, and in each such case, proper provision
shall be made so that:
(A) each holder of record of a Right (other than Rights which
have become null and void pursuant to Section 11(a)(ii)) shall thereafter have
the right to receive, upon the exercise thereof at a price equal to the Purchase
Price (as adjusted pursuant to Section 11(a)(ii)) multiplied by the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable (whether or not such Right was then exercisable) immediately prior
to the time that any Person first became an Acquiring Person (each as
subsequently adjusted thereafter pursuant to Section 11(a)(i), 11(b), 11(c),
11(h), 11(i) and 11(m)), in accordance with the terms of this Rights Agreement
and in lieu of Preferred Stock, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as defined below) not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the Purchase Price (as adjusted pursuant to Section 11(a)(ii)) by
the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the time that any Person first became
an Acquiring Person (as subsequently adjusted thereafter pursuant to Sections
11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)) and (2) dividing that product by
50% of the current per share market price of the Common Stock of such Principal
Party (determined pursuant to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
Section 11(f) of this Rights Agreement to reflect any events occurring in
respect of such Principal Party after the date of such consolidation, merger,
sale or transfer;
(B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Rights Agreement;
(C) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and
(D) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its shares of its
Common Stock) in connection with such consummation of any such transaction as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights; PROVIDED
that, upon the subsequent occurrence of any consolidation, merger, sale or
transfer of assets or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Purchase Price as provided in this
Section 13(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party receivable upon the
exercise of a Right pursuant to this Section 13(a), and such Principal Party
shall take such steps (including, but not limited to, reservation of shares of
stock) as may be necessary to permit the subsequent exercise of the
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Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clauses (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that is
the issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
and the Common Stocks of all of such persons have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Rights Agreement
as the same shall have
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been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof
and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Expiration
Date, and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange, Inc. or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York Stock Exchange,
Inc. or such securities exchange, or, if the Common Stock of the Principal
Party shall not be listed or admitted to trading on the New York Stock
Exchange or a national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be reported by such
other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock or Common Stock equivalents of such Principal Party at less than the
then-current market price per share thereof (determined pursuant to Section
11(d) hereof) or securities exercisable for, or convertible into, Common Stock
or Common Stock equivalents of such Principal Party at less than such
then-current market price, or (ii) providing for any special payment, tax or
similar provision in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then, in such event,
the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
-21-
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person enter into any transaction
of the type contemplated by Sections 13(a)(i), 13(a)(ii) and 13(a)(iii) hereof
if (x) at the time of or immediately after such consolidation, merger, sale,
transfer or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer or other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(b) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates or
(z) the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. 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 by (w)
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, (x) if the Rights are not listed or admitted to trading on the New York
Stock Exchange, Inc., 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,
(y) 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, (z) if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
PROVIDED, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of
-22-
Right Certificates at the time such Rights are exercised for shares of Preferred
Stock as herein provided an amount in cash equal to the same fraction of the
current market value of one share of Preferred Stock. For the purposes of this
Section 14(b), the current market value of a share of Preferred Stock shall be
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates at the time such Rights are exercised or
exchanged for shares of Common Stock as herein provided an amount in cash equal
to the same fraction of the current market value of a whole share of Common
Stock (as determined in accordance with Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives the right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Rights Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Stock), on such holder's own behalf and
for such holder's own benefit, may enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, such Common Stock) in the
manner provided in such Right Certificate and in this Rights 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 Rights 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 Rights 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:
(i) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(ii) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office or agency of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer; and
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(iii) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution
Date, the Common Stock) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to
Section 7(e) hereof, shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise or exchange of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in this Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for any action or omission by the Rights Agent in
connection with the acceptance and administration of this Rights Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Rights Agreement in reliance upon
any Right Certificate or certificate for the Preferred Stock or Common Stock or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. (a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the stock
transfer or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights 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 Person
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would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered, 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 such successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Rights 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 Rights Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chief Executive Officer, any Vice President, the Treasurer or the Secretary of
the Company (each, an "AUTHORIZED OFFICER") 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 Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or wilful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights 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.
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(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights 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 Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming null and void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 and 24,
or the ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person reasonably believed by the Rights Agent to be one of the Authorized
Officers, and to apply to such Authorized Officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
Authorized Officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any Authorized Officer of the Company actually receives such application, unless
any such Authorized Officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Rights Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
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(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof) or a transferee
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock or Preferred Stock by registered or certified mail,
and, following the Distribution Date, to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (A)
a Person organized and doing business under the laws of the United States or any
State thereof, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million or (B) an affiliate of a
Person described in clause (A) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and, following
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
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Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement. In
addition, in connection with the issuance or sale of Common Stock following the
Distribution Date and prior to the Expiration Date, the Company may with respect
to shares of Common Stock so issued or sold pursuant to (i) the exercise of
stock options, (ii) under any employee plan or arrangement, (iii) the exercise,
conversion or exchange of securities, notes or debentures issued by the Company
or (iv) a contractual obligation of the Company, in each case existing prior to
the Distribution Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale.
Section 23. REDEMPTION. (a) The Board of Directors of the
Company may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than all the then-outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the "REDEMPTION PRICE"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the current
market price of the Common Stock at the time of redemption as determined
pursuant to Section 11(d)(i) hereof) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights (or such later time as
the Board of Directors may establish for the effectiveness of such redemption),
the Company shall mail a notice of redemption to all the holders of the
then-outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. EXCHANGE. (a) The Board of Directors of the
Company may, at its option, at any time after any Person first becomes an
Acquiring Person, exchange all or part of the then-outstanding and exercisable
Rights (which shall not include Rights that have not become effective or that
have become null and void pursuant to the provisions of Section 11(a)(ii)
hereof) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar
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transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after an Acquiring Person becomes the Beneficial Owner of shares of Common
Stock aggregating 50% or more of the shares of Common Stock then outstanding.
From and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to this Section 24(a)
shall thereafter be exercisable only in accordance with Section 13 and may not
be exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (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 that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; PROVIDED, HOWEVER, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
shall promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) The Company may at its option substitute and, in the event
that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued (and unreserved) to permit an exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
substitute to the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fraction thereof (or equivalent preferred shares as such term
is defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of Preferred Stock
(or equivalent preferred share) multiplied by such number or fraction is equal
to the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall at any time after the earlier of the Distribution Date or the Stock
Acquisition Date propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of outstanding
Preferred Stock),
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(iv) to effect the liquidation, dissolution or winding up of the Company or (v)
to declare or pay any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution or offering of rights or warrants, or the date on
which such liquidation, dissolution, reclassification, subdivision, combination,
consolidation or winding up is to take place and the date of participation
therein by the holders of the Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate (or if occurring prior to the
Distribution Date, the holders of the Common Stock) in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under Section
11(a)(ii) and Section 13 hereof.
Section 26. NOTICES. Notices or demands authorized by this
Rights 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:
Cognizant Technology Holdings Corporation
500 Glenpointe Centre West
Teaneck, New Jersey 07666
Attention: Steven E. Schwartz,
Vice President and Chief Corporate Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights 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:
American Stock Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, New York 10038
Attenton: Joseph F. Wolf,
Vice President
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if
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sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise
provided in this Section 27, for so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Rights
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as otherwise provided
in this Section 27, the Company may, and the Rights Agent shall, if the Company
so directs, supplement or amend this Rights Agreement without the approval of
any holders of Right Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable; PROVIDED, HOWEVER,
that no such supplement or amendment shall adversely affect the interests of the
holders of Right Certificates as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), and no such amendment may cause
the Rights again to become redeemable or cause this Rights Agreement again to
become amendable other than in accordance with this sentence. Notwithstanding
anything contained in this Rights Agreement to the contrary, no supplement or
amendment shall be made which decreases the Redemption Price. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment; PROVIDED that any
supplement or amendment that does not amend Sections 18, 19, 20 or 21 hereof, or
this Section 27, in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also executed by the
Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Rights
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Agreement). All such actions, calculations, interpretations and determinations
that are done or made by the Board of Directors of the Company in good faith,
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties.
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement or applicable to this Rights 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 Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW. This Rights Agreement 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.
Section 33. COUNTERPARTS. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and attested, all as of the day and year first
above written.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Attest: /s/ Gordon Coburn By: /s/ Wijeyaraj Mahadeva
------------------ ------------------------
Name: Wijeyaraj Mahadeva
Title: Chairman of the Board
and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
Attest: /s/ J.F. Wolf By: /s/ Herbert J. Lemmer
--------------- -----------------------
Name: Herbert J. Lemmer
Title: Vice President
EXHIBIT A
---------
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
-------------------
Cognizant Technology Solutions Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "COMPANY"), hereby certifies that the following resolution was
duly adopted by the Board of Directors of the Company on March 5, 2003 in
accordance with the provisions of Section 103 of the General Corporation Law of
the State of Delaware:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Company (hereinafter being referred to as the "BOARD OF
DIRECTORS" or the "BOARD") in accordance with the provisions of the Company's
Amended and Restated Certificate of Incorporation (hereinafter being referred to
as the "CERTIFICATE OF INCORPORATION"), the Board of Directors hereby creates a
series of Preferred Stock, par value $.10 per share, of the Company, to be
designated the "Series A Junior Participating Preferred Stock" and hereby adopts
the resolution establishing the designations, number of shares, preferences,
voting powers and other rights and the restrictions and limitations thereof, of
the shares of such series as set forth below:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated
as "Series A Junior Participating Preferred Stock" (the "SERIES A PREFERRED
STOCK") and the number of shares constituting the Series A Preferred Stock shall
be 125,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; PROVIDED, that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Company convertible into Series A
Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock of the Company (the "PREFERRED STOCK") (or any
similar stock) ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Class A Common
A-1
Stock, par value $.01 per share, of the Company (the "COMMON STOCK")
and of any other stock of the Company ranking junior to the Series A
Preferred Stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to
herein as a "DIVIDEND PAYMENT DATE"), commencing on the first Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock (the "ISSUE DATE"), in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common
Stock, declared on the Common Stock since the immediately preceding
Dividend Payment Date or, with respect to the first Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall at any time after March 17,
2003 declare and pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); PROVIDED
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Dividend Payment Date and
the next subsequent Dividend Payment Date, a dividend of $1 per share on
the Series A Preferred Stock shall nevertheless be payable, when, as and if
declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series A Preferred
Stock from the Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record
date for the first Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before such
Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-
A-2
share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Certificate of Incorporation
or required by law, each share of Series A Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters upon which the holders of
the Common Stock of the Company are entitled to vote. In the event the
Company shall at any time after March 17, 2003 declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock, and except as otherwise required
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
(D) If, at the time of any annual meeting of stockholders for
the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share or shares of Series A
Preferred Stock are in default, the number of directors constituting the
Board of Directors of the Company shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Company, the holders of record of the Series A Preferred
Stock, voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders (and at
each subsequent annual meeting of stockholders), unless all dividends in
arrears on the Series A Preferred Stock have been paid or declared and set
apart for payment prior thereto, to vote for the election of two directors
of the Company, the holders of any Series A Preferred Stock being entitled
to cast a number of votes per share of Series A Preferred Stock as is
specified in paragraph (A) of this Section 3. Each
A-3
such additional director shall serve until the next annual meeting of
stockholders for the election of directors, or until his successor shall be
elected and shall qualify, or until his right to hold such office
terminates pursuant to the provisions of this Section 3(D). Until the
default in payments of all dividends which permitted the election of said
directors shall cease to exist, any director who shall have been so elected
pursuant to the provisions of this Section 3(D) may be removed at any time,
without cause, only by the affirmative vote of the holders of the shares of
Series A Preferred Stock at the time entitled to cast a majority of the
votes entitled to be cast for the election of any such director at a
special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Preferred Stock
shall be divested of the foregoing special voting rights, subject to
revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate,
and the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(D) shall be in
addition to any other voting rights granted to the holders of the Series A
Preferred Stock in this Section 3.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on shares
of Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Company ranking junior (as
to dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock or rights, warrants or options to acquire
such junior stock; or
A-4
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of
the Company unless the Company could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
any conditions and restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of stock ranking on a
parity upon liquidation, dissolution or winding up with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event, however, that there are not sufficient assets available to permit
payment in full of the Series A liquidation preference and the liquidation
preferences of all other classes and series of stock of the Company, if any,
that rank on a parity with the Series A Preferred Stock in respect thereof, then
the assets available for such distribution shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of such parity shares in
the proportion to their respective liquidation preferences. In the event the
Company shall at any time after the Issue Date declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(A) of
A-5
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Neither the merger or consolidation of the Company into or
with another entity nor the merger or consolidation of any other entity into or
with the Company (nor the sale of all or substantially all of the assets of the
Company) shall be deemed to be a liquidation, dissolution or winding up of the
Company within the meaning of this Section 6.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are converted into, exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Preferred Stock shall at the same time be similarly
converted into, exchanged for or changed into an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is converted, exchanged or converted. In the event the Company shall at any time
after the Issue Date declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the conversion, exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. NO REDEMPTION. The shares of Series A Preferred
Stock shall not be redeemable from any holder.
Section 9. RANK. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, junior to all other
series of Preferred Stock and senior to the Common Stock.
Section 10. AMENDMENT. If any proposed amendment to the
Certificate of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special rights given
to the Series A Preferred Stock so as to affect the Series A Preferred Stock
adversely, then the holders of the Series A Preferred Stock shall be entitled to
vote separately as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption thereof, in addition
to such other vote as may be required by the General Corporation Law of the
State of Delaware.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares,
A-6
to exercise voting rights, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Preferred Stock.
A-7
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its ______________ and attested by its
Secretary this __th day of March, 2003.
-----------------------------
Name:
Title:
Attest:
- ----------------------
Secretary
A-8
EXHIBIT B
---------
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER MARCH 5, 2013 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
COGNIZANT TECHNOLOGY SOLUTIONS 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 March 5, 2003 as the same may be amended from time to
time (the "RIGHTS AGREEMENT"), between Cognizant Technology Solutions
Corporation, a Delaware corporation (the "COMPANY"), and American Stock Transfer
& Trust Company (the "RIGHTS AGENT"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on March 5, 2013 at the office or
agency of the Rights Agent designated for such purpose, or of its successor as
Rights Agent, one one-thousandth of a fully paid non-assessable share of Series
A Junior Participating Preferred Stock, par value $.10 per share (the "PREFERRED
STOCK"), of the Company, at a purchase price of $[_____] per one one-thousandth
of a share of Preferred Stock (the "PURCHASE PRICE"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one one-thousandths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of [__________] [__], 20[__],
based on the Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-thousandths of a
share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a
B-1
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. The Company will mail to the holder of this
Right Certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part by the
Company for shares of Preferred Stock or shares of the Company's Class A Common
Stock, par value $.01 per share.
No fractional shares of Preferred Stock or Common Stock will
be issued upon the exercise or exchange of any Right or Rights evidenced hereby
(other than fractions of Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise or exchange hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right certificate shall have been exercised or exchanged 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.
B-2
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________ __, ____.
ATTEST: COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
By: _________________________ By: ______________________
Countersigned:
- ---------------------------,
as Rights Agent
By: _________________________
Authorized Signatory
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfer unto ___________________________________
_____________________________________________________
(Please print name and address of transferee)
_____________________________________________________
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated: ______________, ____
_________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company,
broker, dealer or other eligible institution participating in a recognized
signature guarantee medallion program.
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being sold, assigned or transferred to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
_________________________
Signature
- -------------------------------------------------------------------------------
B-4
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock (or other securities or property) issuable upon the
exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ______________________________________
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: ________________, ___
______________________________
Signature
(Signature must conform to holder
specified on Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company,
broker, dealer or other eligible institution participating in a recognized
signature guarantee medallion program.
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being sold, assigned or transferred to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
______________________________
Signature
B-5
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
_________________________________
B-6
EXHIBIT C
---------
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On March 5, 2003, the Board of Directors of Cognizant
Technology Solutions Corporation (the "COMPANY") declared a dividend of one
preferred share purchase right (a "RIGHT") for each outstanding share of Class A
common stock, par value $.01 per share, of the Company (the "COMMON STOCK"). The
dividend is payable on March 17, 2003 (the "RECORD DATE") to the stockholders of
record on that date. Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $.10 per share (the "PREFERRED STOCK") of the Company
at a price of $450 per one one-thousandth of a share of Preferred Stock (as the
same may be adjusted, the "PURCHASE PRICE"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of March 5, 2003 (as the
same may be amended from time to time, the "RIGHTS AGREEMENT"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"RIGHTS AGENT").
Until the close of business on the earlier of (i) the tenth
day after the first date of a 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 shares of Common Stock then outstanding or (ii)
the tenth business day (or such later date as may be determined by action of the
Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) after the date of commencement of, or the
first public announcement of an intention to commence, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the shares of Common Stock then
outstanding (the earlier of such dates being called the "DISTRIBUTION DATE"),
the Rights will be evidenced by the Common Stock certificates or by a current
ownership statement issued with respect to uncertificated shares of Common Stock
in lieu of such a certificate (an "OWNERSHIP STATEMENT"). The Rights Agreement
does not restrict any person who beneficially owns 15% or more of the shares of
Common Stock then outstanding as of the date of the Rights Agreement or the date
of the first public announcement of the Rights Agreement, so long as such person
does not become the beneficial owner of additional shares of Common Stock and,
upon becoming the beneficial owner of such additional shares, such person is
still (or again becomes) the beneficial owner of 15% or more of the shares of
Common Stock then outstanding. The phrase "THEN OUTSTANDING," when used with
reference to a Person's beneficial ownership of the Company's Common Stock,
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially under the Rights
Agreement.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferable only in connection with the transfer of Common Stock. Until the
Distribution Date (or earlier redemption or expiration
C-1
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock, or the transfer of any shares of Common Stock represented by an
Ownership Statement, outstanding as of the Record Date, even without a notation
incorporating the Rights Agreement by reference or a copy of this Summary of
Rights, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate or Ownership Statement.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("RIGHT CERTIFICATES") will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on March 5, 2013 (the "FINAL EXPIRATION DATE"), unless
the Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into Preferred Stock with
a conversion price, less than the then-current market price of the Preferred
Stock or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
or dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above).
The Rights are also subject to adjustment in the event of a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend payment
of the greater of (a) $1 per share and (b) an amount equal to 1,000 times the
dividend declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock
will be entitled to a minimum preferential liquidation payment of $100 per share
(plus any accrued but unpaid dividends) but will be entitled to an aggregate
1,000 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1,000 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
C-2
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a Right
and payment of the Purchase Price, that number of shares of Common Stock having
a market value of two times the Purchase Price.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then-current exercise price of the Right, that number of shares
of common stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the Purchase Price.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event described
in the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or a fractional share of Preferred Stock (or of a share of a similar class or
series of the Company's preferred stock having similar rights, preferences and
privileges) of equivalent value, per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "REDEMPTION PRICE"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the Redemption Price, amend the Rights Agreement in
any manner. After the Rights are no longer redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights Agreement in any manner
that does not adversely affect the interests of holders of the Rights.
C-3
Until a Right is exercised or exchanged, the holder thereof,
as such, will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated
herein by reference.
C-4