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EXHIBIT 1
JDS UNIPHASE CORPORATION
(formerly Uniphase Corporation)
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
FOURTH AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of February 7, 2001
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
Section 1. Certain Definitions 6
Section 2. Appointment of Rights Agent 10
Section 3. Issue of Rights Certificates 10
Section 4. Form of Rights Certificates 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 12
Section 8. Cancellation and Destruction of Rights Certificates 14
Section 9. Reservation and Availability of Capital Stock 14
Section 10. Preferred Stock Record Date 15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights 15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 21
Section 14. Fractional Rights and Fractional Shares 23
Section 15. Rights of Action 23
Section 16. Agreement of Rights Holders 24
Section 17. Rights 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 25
Section 20. Duties of Rights Agent 25
Section 21. Change of Rights Agent 27
Section 22. Issuance of New Rights Certificates 27
Section 23. Redemption and Termination 27
Section 24. Notice of Certain Events 28
Section 25. Notices 28
Section 26. Supplements and Amendments 29
Section 27. Successors 29
Section 28. Determinations and Actions by the Board of Directors, etc 29
Section 29. Benefits of this Agreement 30
Section 30. Severability 30
Section 31. Governing Law 30
Section 32. Counterparts 30
Section 33. Descriptive Headings 30
Section 34. Exchange 30
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Exhibit A Form of Rights Certificate Form of Summary of Rights A
Exhibit B Form of Summary of Rights B
Exhibit C Certificate of Designation C
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FOURTH AMENDED AND RESTATED RIGHTS AGREEMENT
FOURTH AMENDED AND RESTATED RIGHTS AGREEMENT the ("Agreement"), dated as
of February 7, 2001 (the "Agreement"), between JDS Uniphase Corporation
(formerly Uniphase Corporation), a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York trust company (the "Rights
Agent").
WHEREAS, effective June 22, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (i) authorized and declared a
dividend distribution of one Right for each share of common stock, par value
$.001 per share, of the Company (the "Company Common Stock") outstanding at the
Close of Business on July 6, 1998 (the "Record Date"), and (ii) authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant
hereto) for each share of Company Common Stock issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and, except
as otherwise provided in Section 22, the Distribution Date, each Right initially
representing the right to purchase upon the terms and subject to the conditions
hereinafter set forth one Unit of Series B Preferred Stock of the Company (the
"Rights");
WHEREAS, the Board of Directors of the Company and the Rights Agent have
previously amended the Agreement to, among other things, change the provisions
governing supplements and amendments to the Agreement and to give effect to the
issuance of exchangeable shares (the "Exchangeable Shares") in the capital of
JDS Uniphase Canada Ltd. ("Exchangeco") pursuant to the terms of an agreement
(the "Merger Agreement") dated as of January 28, 1999 among the Company, JDS
FITEL, Inc. ("JDS") and Exchangeco, as amended and restated as of April 29,
1999; and
WHEREAS, on December 13, 2000, the Board of Directors of the Company and
the Rights Agent have determined that it is in the best interest of the Company
and the holders of the Company Common Stock to amend the Agreement to increase
the purchase price of the Series B Preferred Stock, par value $0.001 per share,
of the Company from $600 to $3,600.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree that this Agreement amends
and restates the Third Amended and Restated Rights Agreement to read in its
entirety as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates or Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Company Common Stock then outstanding. For purposes
of determining the number of shares of Company Common Stock outstanding at any
time, such number shall be the sum of the shares of Company Common Stock then
outstanding plus the number of shares of Company Common Stock issuable upon
exchange of the Exchangeable Shares then outstanding; provided that shares of
Company Common Stock held by the Company or any Subsidiary of the Company and
shares of Company Common Stock issuable upon exchange of Exchangeable Shares
held by the Company or any Subsidiary of the Company shall be deemed not to be
outstanding. Notwithstanding the foregoing: (i) an "Acquiring Person" shall not
include (A) the Company, (B) any Subsidiary of the Company, (C) any employee
benefit plan maintained by the Company or any of its Subsidiaries, (D) any
trustee or fiduciary with respect to such employee benefit plan acting in such
capacity or a trustee or fiduciary holding shares of Company Common Stock or
Exchangeable Shares for the purpose of funding any such plan or employee
benefits, (E) any Person who has reported or is required to report Beneficial
Ownership of Company Common Stock on Schedule 13G under the Exchange Act (or any
comparable or successor report), but only so long as (x) such Person is eligible
to report such ownership on Schedule 13(G) under the Exchange Act (or any
comparable or successor report), (y) such Person has not reported and is not
required to report such ownership on Schedule 13(D) under the Exchange Act (or
any comparable or successor report) and such Person does not hold shares of
Company Common Stock on behalf of any other Person who is required to report
Beneficial Ownership of such shares of Company Common Stock on such Schedule
13(D), and (z) such Person does not beneficially own 20% or more of the shares
of Company Common Stock then outstanding, (F) any Person if (1) the Board of
Directors of the Company determines in good faith that such Person who would
otherwise be an "Acquiring Person" became such inadvertently (including, without
limitation, because (x) such Person was unaware that it beneficially owned a
percentage of Company Common Stock that would otherwise cause such Person to be
an
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"Acquiring Person" or (y) such Person was aware of the extent of its Beneficial
Ownership of Company Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, (2) as promptly as
practicable such Person divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Company Common Stock so that such Person would no
longer beneficially own 15% or more of the then outstanding shares of Company
Common Stock, and (3) such Person does not become the Beneficial Owner of any
additional shares of Company Common Stock after such Person becomes aware that
such Person would be an Acquiring Person (but for the operation of this clause
(i)(F)), unless upon becoming the Beneficial Owner of such additional shares
such Person is the Beneficial Owner of less than 15% of the then outstanding
shares of Company Common Stock, (G) any Person who becomes the Beneficial Owner
of 15% or more of the then outstanding shares of Company Common Stock as a
result of the acquisition of shares of Company Common Stock directly from the
Company, or Exchangeable Shares directly from Exchangeco, in one or more
transactions approved by the Board of Directors of the Company or the Board of
Directors of Exchangeco, as the case may be, which Persons shall include,
without limitation, Koninklijke Philips Electronics N.V., a company duly
established under the laws of the Netherlands upon its acquisition of Company
Common Stock upon conversion of those shares of Series A Preferred Stock, par
value $.001 per share, held at the date hereof by such stockholder, (H) The
Furukawa Electric Co., Ltd., a corporation incorporated under the laws of Japan
("Furukawa"), and its Affiliates upon their acquisition of Company Common Stock
or Exchangeable Shares pursuant to the arrangement contemplated by the Merger
Agreement or the exchange of Exchangeable Shares acquired pursuant to the
arrangement contemplated by the Merger Agreement, (I) Furukawa and its
Affiliates upon their acquisition of Beneficial Ownership of Company Common
Stock pursuant to their acquisition of shares in or assets of any Person,
provided that the Company Common Stock which Furukawa or its Affiliates have
acquired Beneficial Ownership of pursuant to such acquisition is sold or
otherwise transferred to a Person who is not Furukawa or any of its Affiliates
within 180 days of the date Furukawa or its Affiliates acquire such Beneficial
Ownership, or (J) the holder of the Special Voting Stock, and (ii) no Person
shall be deemed an "Acquiring Person" as a result of the acquisition of shares
of Company Common Stock by the Company, or Exchangeable Shares by the Company or
any Subsidiary of the Company which, by reducing the number of shares of Company
Common Stock or Exchangeable Shares, as the case may be, outstanding, increases
the proportional number of shares beneficially owned by such Person; provided,
however, that if (A) a Person would become an Acquiring Person (but for the
operation of this subclause (ii)) as a result of the acquisition of shares of
Company Common Stock by the Company or Exchangeable Shares by the Company or any
Subsidiary of the Company and (B) after such share acquisition by the Company or
the Subsidiary, such Person becomes the Beneficial Owner of any additional
shares of Company Common Stock or Exchangeable Shares, then such Person shall be
deemed an Acquiring Person unless upon becoming the Beneficial Owner of such
additional shares such Person is the Beneficial Owner of less than 15% of the
then outstanding shares of Company Common Stock. Each Person identified in
subclauses (A), (B), (C) and (D) of this Section (1)(a) is individually an
"Exempt Person" and collectively "Exempt Persons."
(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 hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to have "Beneficial Ownership" of, and to "beneficially own", any
securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of
the General Rules and Regulations under the Exchange Act as in effect on
the date hereof (the "Exchange Act Regulations"); provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, to have
"Beneficial Ownership" of, or to "beneficially own", any securities
under this subparagraph (i) as a result of an agreement, arrangement or
understanding to vote such securities if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy or consent given
in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the Exchange Act
and the Exchange Act Regulations, and (B) is not reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report);
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(ii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in the proviso to
subparagraph (i) of this paragraph (c)) or disposing of such securities;
or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time
or upon the satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise, including, without limitation, shares of Company
Common Stock receivable upon the exchange of Exchangeable Shares (as
defined in the Merger Agreement); provided, however, that under this
paragraph (c) a Person shall not be deemed the "Beneficial Owner" of, to
have "Beneficial Ownership" of, or to "beneficially own", (A) securities
tendered pursuant to a tender or exchange offer made in accordance with
Exchange Act Regulations (or a take-over bid made in accordance with
Canadian Securities Laws) by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange, (B) securities that may be issued upon exercise of
Rights or Exchangeable Share Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities that may be issued upon
exercise of Rights or Exchangeable Share Rights from and after the
occurrence of a Triggering Event, which Rights or Exchangeable Shares
Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section 3(c)
or Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to any
Original Rights; and further provided, however, that (x) nothing in this
paragraph (c) shall cause a Person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, to have "Beneficial
Ownership" 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, (y) no decision reached, or action taken, by the Board of
Directors of the Company or Exchangeco or any committee thereof shall
cause any Person (or any Affiliate or Associate of such Person) who is a
member of the Board of Directors of the Company or Exchangeco or such
committee to be deemed, for the purposes of this Agreement, to be a
"Beneficial Owner" of, to have "Beneficial Ownership" of, or to
"beneficially own" any securities beneficially owned by any other Person
(or any Affiliate or Associate of such Person) who is a member of the
Board of Directors of the Company or any committee thereof solely by
reason of such membership of the Board of Directors or any committee
thereof or participation in the decisions or actions thereof on the part
of either or both of such Persons and (z) 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 paragraph (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.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the city of New York, New York are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., East
Coast time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., East Coast time, on the next succeeding Business
Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Company" means JDS Uniphase Corporation, a Delaware corporation
(formerly Uniphase Corporation), and also means a Principal Party to the extent
provided in Section 13(a).
(h) "Company Common Stock" has the meaning set forth in the Whereas
Clause.
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(i) "Distribution Date" has the meaning set forth in Section 3(a).
(j) "Exchangeable Share Rights" means the right to purchase Exchangeable
Shares as provided in the Exchangeco Rights Agreement.
(k) "Exchangeable Shares" has the meaning set forth in the Whereas
Clause.
(l) "Exchangeco Rights Agreement" means the Rights Agreement dated June
30, 1999 between Exchangeco and CIBC Mellon Trust Company, as rights agent, as
amended from time to time.
(m) "Exchangeco" has the meaning set forth in the Whereas Clause.
(n) "Expiration Date" has the meaning set forth in Section 7(a).
(o) "JDS" has the meaning set forth in the Whereas Clause.
(p) "Merger Agreement" has the meaning set forth in the Whereas Clause.
(q) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act as in effect on the date hereof.
(r) "Preferred Stock" shall mean the Series B Preferred Stock, par value
$.001 per share, of the Company having the voting powers, designation,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions set forth in the Certificate of
Designation attached as Exhibit C hereto, as amended from time to time.
(s) "Purchase Price" has the meaning set forth in Section 7(b).
(t) "Record Date" has the meaning set forth in the Whereas Clause.
(u) "Right" has the meaning set forth in the Whereas Clause.
(v) "Rights Certificate" has the meaning set forth in Section 3(a).
(w) "Rights Dividend Declaration Date" has the meaning set forth in the
Whereas Clause.
(x) "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii) hereof.
(y) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
(z) "Special Voting Stock" means the share of preferred stock, par value
$.001 per share, of the Company designated as Special Voting Stock, issued to
CIBC Mellon Trust Company pursuant to the voting and exchange trust agreement
dated as of July 6, 1999.
(aa) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report, or any
amendment to any report, pursuant to Section 13(d) of the Exchange Act (or any
comparable or successor report)) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(bb) "Subsidiary" shall mean, with reference to any Person, any other
Person of which an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of such
other Person is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such first-mentioned Person.
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(cc) "Summary of Rights" has the meaning set forth in Section 3(b).
(dd) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(ee) "Unit" has the meaning set forth in Section 7(b).
In addition, the following terms are defined in the Sections indicated
below:
DEFINED TERM SECTION NUMBER
---------------------------- ---------------
Adjustment Shares 11(a)(ii)
Common Stock Equivalents 11(a)(iii)
Current Value 11(a)(iii)
Depositary Agent 7(c)
Equivalent Preferred Stock 11(b)
Exchange Act 1(b)
Exchange Act Regulations 1(c)
Exchange Ratio 34(a)
Exempt Person 1(a)
Final Expiration Date 7(a)
Furukawa 1(a)
Nasdaq 11(d)(i)
Original Rights 1(c)
Redemption Price 23(a)
Registered Common Stock 13(b)(ii)
Registration Date 9(c)
Registration Statement 9(c)
Section 11(a)(iii) Trigger Date 11(a)(iii)
Securities Act 9(c)
Spread 11(a)(iii)
Substitution Period 11(a)(iii)
Trading Day 11(d)(i)
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
co-rights agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of (i) the Close
of Business on the tenth Business Day after the Stock Acquisition Date, and (ii)
the Close of Business on the tenth Business Day (or such later date as may be
determined by action of a majority of the Board of Directors of the Company
prior to the occurrence of a Section 11(a)(ii) Event) after the date that a
tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule (or a take-over bid by any Person (other
than an Exempt Person) is first made and delivered under Canadian securities
laws), if upon consummation thereof such Person would be an Acquiring Person
(including, in the case of both clauses (i) and (ii), any such time which is
after the Rights Dividend Declaration Date and prior to the issuance of the
Rights) (the earlier of (i) and (ii) above being the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for shares of Company Common Stock registered in
the names of the holders of shares of Company Common Stock as of and subsequent
to the Record Date (which certificates for shares of Company Common Stock shall
be deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with the transfer of
the underlying shares of Company Common Stock including a transfer to the
Company; provided, however, that if a tender or exchange offer (or take-over
bid) is terminated prior to the occurrence of a Distribution Date, then no
Distribution Date shall occur as a result of such tender or exchange offer (or
take-over bid). As soon as practicable after the Distribution Date, the Rights
Agent will send by first- class, insured, postage prepaid mail, to each record
holder of shares of Company Common Stock as of the Close of Business on the
Distribution Date, at the
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address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of
Company Common Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for Company Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with the Summary of Rights. Until
the Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any such certificate for Company Common Stock outstanding as of the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Company Common Stock
represented thereby.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
JDS Uniphase Corporation (the "Company") and American Stock
Transfer & Trust Company (the "Rights Agent") dated as of June
22, 1998, as amended 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 office of the
stock transfer administration office of the Rights Agent. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BECOME NULL AND VOID.
With respect to certificates representing shares of Company Common Stock
that bear the foregoing legend, until the earlier of the Distribution Date and
the Expiration Date, the Rights associated with the shares of Company Common
Stock represented by such certificates shall be evidenced by such certificates
alone and registered holders of the shares of Company Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. The Rights Certificates (and the forms
of election to purchase, assignment and certificate to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit A 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
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Agreement, or as may be required to comply with any applicable law or any rule
or regulation thereunder or with any rule or regulation of any 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 Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof to purchase such
number of Units of Preferred Stock as shall be set forth therein at the price
set forth therein, but the amount and type of securities, cash or other assets
that may be acquired 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) Rights Certificates shall be
executed on behalf of the Company by its Chairman, the President or one of its
Vice Presidents under its corporate seal reproduced thereon attested by its
Secretary, Treasurer or one of its Assistant Secretaries. The signature of any
of these officers on the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of the individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature of such Rights Certificates or did not
hold such offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly
executed by the Rights Agent by manual signature of an authorized signatory, and
such countersignature upon any Rights Certificate shall be conclusive evidence,
and the only evidence, that such Rights Certificate has been duly countersigned
as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. (a) Subject to the
provisions of Sections 4, 7(e) and 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and executed the
certificate set forth in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request; whereupon the Rights Agent shall, subject
to the provisions of Section 7(e) and Section 14 hereof, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Subject to Section 7(e) hereof, if a Rights Certificate shall be
mutilated, lost, stolen or destroyed, upon request by the registered holder of
the Rights represented thereby and upon payment to the Company and the Rights
Agent of all reasonable expenses incident thereto, there shall be issued, in
exchange for and upon cancellation of the mutilated Rights Certificate, or in
substitution for the lost, stolen or destroyed Rights Certificate, a new Rights
Certificate, in substantially the form of the prior Rights Certificate, of like
tenor and representing the equivalent number of Rights, but, in the case of
loss, theft or destruction, only upon receipt of evidence satisfactory to the
Company and the Rights Agent of such loss, theft or destruction of such Rights
Certificate and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. (a)
Prior to the earlier of (i) the Close of Business on June 22, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
10
provided in Section 23 hereof or (iii) the time at which the Rights are
exchanged as provided in Section 34 hereof (the earlier of (i), (ii) and (iii)
being the "Expiration Date"), the registered holder of any Rights Certificate
may, subject to the provisions of Sections 7(e), 9(c) and 11(a)(ii) hereof,
exercise the Rights evidenced thereby, in whole or in part, at any time after
the Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each such
one one-thousandth of a share being a "Unit") of Preferred Stock upon exercise
of Rights shall be $3,600, subject to adjustment from time to time as provided
in Sections 11 and 13(a) hereof (such purchase price, as so adjusted, being the
"Purchase Price"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with the Rights Agent or other
corporation in good standing organized under the laws of the United States or
any State of the United States, 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 (such institution being the
"Depositary Agent"), certificates representing the shares of Preferred Stock
that may be acquired upon exercise of the Rights and shall cause such Depositary
Agent to enter into an agreement pursuant to which the Depositary Agent shall
issue receipts representing interests in the shares of Preferred Stock so
deposited. Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price for the Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Preferred Stock as are to be purchased and the Company will direct the
Depositary Agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such Company Common Stock, other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified or bank check or money
order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or any such Associate or Affiliate) or to any Person with whom
the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which the Board of
Directors has determined to be part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect
11
to such Rights, whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) are complied with, but shall have no liability to any holder of
Rights or any other Person as a result of its failure to make any determination
under this Section 7(e) with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights Certificate
to the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise by such registered holder unless such registered holder
shall have (i) completed and executed the certificate following the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The Company shall
at all times prior to the Expiration Date cause to be reserved and kept
available, out of its authorized and unissued shares of preferred stock, the
number of shares of Preferred Stock that, as provided in this Agreement, will be
sufficient to permit the exercise in full of all outstanding Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock (or other equity securities of the Company) issuable
upon exercise of all outstanding Rights above the number then reserved, the
Company shall make appropriate increases in the number of shares so reserved to
the extent practicable.
(b) If the shares of Preferred Stock to be issued and delivered upon the
exercise of the Rights may be listed on any national securities exchange or
automated quotation system, the Company shall during the period from the
Distribution Date through the Expiration Date use its best efforts to cause all
securities reserved for such issuance to be listed on such exchange or system
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws. The
Company may temporarily suspend, for a period of time not to exceed one hundred
twenty (120) days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall
12
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
(d) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities (subject to payment of the Purchase Price), duly
and validly authorized and issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax imposed
in connection with the issuance or delivery of the Rights Certificates or upon
the exercise of Rights; provided, however, the Company shall not be required to
pay any such tax imposed in connection with the issuance or delivery of Units of
Preferred Stock, or any certificates or depositary receipts for such Units of
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to any Person other than the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to, or in a name other than that of, the registered holder upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate or depositary receipt for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) transfer books of the Company are open and,
further provided, however, that if delivery of Units of Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) is delayed
pursuant to Section 9(c) or 11(a)(ii) hereof, such Persons shall be deemed to
have become the record holders of such Units of Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) only when such Units (or
other securities) first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of securities 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 Rights
Dividend Declaration Date (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable on such date
upon exercise of the Rights, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or
13
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 the exercise of one
Right. If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 34 hereof, in the event any Person shall
become an Acquiring Person (the first occurrence of such event being a
"Section 11(a)(ii) Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the
Section 11(a)(ii) Event multiplied by the number of Units of Preferred
Stock for which a Right was exercisable immediately prior to such
Section 11(a)(ii) Event, whether or not such Right was then exercisable,
and (B) each holder of a Right, except as otherwise provided in this
Section 11(a)(ii) and Section 7(e) and Section 11(a)(iii) hereof, shall
thereafter have the right to receive, upon exercise thereof at a price
equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Agreement, such number of Units of Preferred Stock as
shall equal the result obtained by dividing the Purchase Price (as so
adjusted) by 50% of the current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) on the date of such
Section 11(a)(ii) Event (such Units of Preferred Stock being the
"Adjustment Shares"); provided, however, that the Purchase Price (as so
adjusted) and the number of Units of Preferred Stock so receivable upon
exercise of a Right shall, following the Section 11(a)(ii) Event, be
subject to further adjustment as appropriate in accordance with Section
11 hereof. Notwithstanding the foregoing, the Rights shall not be
exercisable pursuant to this Section 11(a)(ii) until the time period
during which the Rights may be redeemed pursuant to Section 23 hereof
shall have expired.
(iii) The Company, by the vote of a majority of the Board of
Directors, may at its option substitute for a Unit of Preferred Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii), shares of Company Common Stock or fractions thereof
having a current market price (as determined by Section 11(d) hereof)
equal to the current market price of a Unit of Preferred Stock on the
date of the Section 11(a)(ii) Event. In the event that the number of
shares of Preferred Stock which are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), the Company,
by the vote of a majority of the Board of Directors shall, to the extent
permitted by applicable law and any material agreements then in effect
to which the Company is a party: (A) determine the excess (such excess
being the "Spread") of (1) the aggregate value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (as adjusted in accordance with the foregoing
subparagraph (ii)), and (B) with respect to each Right (other than
Rights which have become void pursuant to Section 7(e)), make adequate
provision to substitute, in whole or in part, for such Adjustment
Shares, upon exercise of a Right and payment of the Purchase Price (as
adjusted in accordance with the foregoing subparagraph (ii)), (1) cash,
(2) a reduction in the Purchase Price, (3) shares of Company Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock (such other
shares being "common stock equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value which, when added to the value of the Units of
Preferred 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 a majority of the Board of Directors, after receiving
advice from a nationally recognized investment banking firm; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(iii) Trigger Date"), then,
subject to Section 34 hereof, the Company shall be obligated (to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party) to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, Units of Preferred Stock (to the extent available) and/or shares
(or fractions of shares, at the discretion of the Board) of Company
Common Stock (to the extent available), and then, if necessary, cash or
a combination thereof, which Units of Preferred Stock, shares (or
fractions of shares) of Company Common Stock and/or cash shall have an
aggregate value equal to the Spread. If, upon the occurrence of the
Section 11(a)(ii) Event, a
14
majority of the Board of Directors elects to issue shares of Company
Common Stock upon exercise of the Rights and determines in good faith
that it is likely that sufficient additional shares of Company Common
Stock could be authorized for issuance upon exercise in full of the
Rights, then, if a majority of the Board of Directors so elects, the
thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section
11(a)(iii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the second and/or third sentence
of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof and the last sentence of this subparagraph (iii),
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. For
purposes of this Section 11(a)(iii), the value of a Unit of Preferred
Stock or share of Company Common Stock shall be the current market price
(as determined pursuant to Section 11(d) hereof) per Unit of Preferred
Stock or share of Company Common Stock, as the case may be, on the
Section 11(a)(iii) Trigger Date and the value of any common stock
equivalent shall be deemed to have the same value as a share of Company
Common Stock on such date. A majority of the Board of Directors of the
Company may, but shall not be required to, establish procedures to
allocate the right to receive Units of Preferred Stock or shares of
Company Common Stock, as the case may be, 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 to
subscribe for or purchase (for a period expiring within forty-five calendar days
after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section l1(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible)
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 by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend paid out of funds legally available
therefor), assets (other than a dividend payable in shares of Preferred Stock,
but including any dividend payable in stock other than Preferred Stock) or
subscription rights, options or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date less the fair market value (as determined in
good faith by a majority of the
15
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holder of
the Rights) of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights, options or warrants distributable in
respect of a share of Preferred Stock and the denominator of which shall be such
current market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock 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 be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
shares for the ten consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, if prior to the
expiration of such requisite ten Trading Day period the issuer announces either
(A) a dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then, following the
ex-dividend date for such dividend or the record date for such subdivision,
combination or reclassification, as the case may be, the "current market price"
shall be properly adjusted to take into account such event. The closing price
for each day shall be, if the shares are listed and admitted to trading on a
national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such shares are listed or admitted to
trading or, if such shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the Nasdaq Stock Market ("Nasdaq") or such other system then in use, or, if on
any such date such shares 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 such shares selected by a majority of the Board of Directors.
If on any such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a majority of
the Board of Directors shall be used. If such shares are not publicly held or
not so listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by a majority of the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term "Trading Day"
shall mean, if such shares are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for Company Common Stock in subparagraph
(i) of this Section 11(d) (other than the fourth sentence thereof). If
the current market price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described in subparagraph
(i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such amount may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the Rights Dividend Declaration
Date) multiplied by the current market price per share of Company Common
Stock. If neither Company Common Stock nor Preferred Stock is publicly
held or so listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as determined in
good faith by a majority of the Board of Directors whose determination
shall be described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent and the holders of the Rights. For all
purposes of this Agreement, the "current market price" of a Unit of
Preferred Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one hundred-thousandth of a share of Preferred Stock,
Company Common Stock or
16
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 mandates such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (k), (l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one hundred-thousandth of a Unit) obtained by
(i) multiplying (x) the number of Units of Preferred Stock covered by a Right
immediately prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Units of Preferred Stock that may be acquired upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred Stock for which
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one hundredth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten days later
than the date of such public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per Unit and the number of Units of Preferred Stock
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the Units 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
17
Company may validly and legally issue such fully paid and non- assessable Units
of Preferred Stock or other such shares at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Board of
Directors shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock,
shall not be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person, (ii) merge with or into any other Person, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its wholly owned Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have distributed or otherwise transferred to its shareholders or other persons
holding an equity interest in such Person Rights previously owned by such Person
or any of its Affiliates and Associates; provided, however, this Section 11(n)
shall not affect the ability of any wholly owned Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other wholly owned Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23, Section 26 or Section 34 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Company Common Stock payable in shares of Company Common
Stock, (ii) subdivide the outstanding shares of Company Common Stock, (iii)
combine the outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
Company Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of Company Common
Stock then outstanding, or issued or delivered thereafter prior to the
Distribution Date or in accordance with Section 22 hereof, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Company Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Company Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Company Common Stock
outstanding
18
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Company Common Stock outstanding
immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Section 11 or Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Company Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Company Common Stock) in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, following the first occurrence of a Section
11(a)(ii) Event, directly or indirectly, either (x) the Company shall
consolidate with, or merge with and into, any other Person, and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger, (y) any Person shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Company Common Stock shall be
changed into or exchanged for stock or other securities of the Company or any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) to any Person or Persons (other than the Company or any of its wholly
owned Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) (any such event being a "Section 13 Event"),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right (other than Rights which have become void as provided in
Section 7(e) hereof), shall thereafter have the right to receive, upon the
exercise thereof at the Purchase Price (as theretofore adjusted in accordance
with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement
and in lieu of Units of Preferred Stock or shares of Company Common Stock, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), which shares shall not be subject to any liens,
encumbrances, rights of call or first refusal, transfer restrictions or other
adverse claims, as shall be equal to the result obtained by dividing the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof) by 50% of the current market price (determined pursuant to Section 11(d)
hereof) per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; provided, however, that the Purchase
Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and
the number of shares of Common Stock of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof to reflect any events occurring in respect
of the Common Stock of such Principal Party after the occurrence of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party in all respects; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9 hereof) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions of this Agreement
shall thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights to its shares of Common Stock; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization
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, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had it, at
the time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no further effect following the first occurrence of any Section 13 Event.
19
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, (A) the Person that
is the issuer of any securities into which shares of Company Common
Stock are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of Common Stock that has the
highest aggregate current market price (determined pursuant to Section
11(d) hereof) and (B) if no securities are so issued, the Person that is
the other party to such merger or consolidation, or, if there is more
than one such Person, the Person the Common Stock of which has the
highest aggregate current market price (determined pursuant to Section
11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the largest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is
a party to such transaction or transactions receives the same portion of
the assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the
assets or earning power cannot be determined, whichever Person the
Common Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); provided, however, that
in any such case, (1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act ("Registered
Common Stock"), or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person but is not a direct or indirect
Subsidiary of another Person which has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person; (3) if the Common Stock of such Person
is not Registered Common Stock or such Person is not a corporation, and
such Person is directly or indirectly controlled by more than one
Person, and one or more of such other Persons has Registered Common
Stock outstanding, "Principal Party" shall refer to whichever of such
other Persons is the issuer of the Registered Common Stock having the
highest aggregate current market price (determined pursuant to Section
11(d) hereof); and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person, and
none of such other Persons have Registered Common Stock outstanding,
"Principal Party" shall refer to whichever ultimate parent entity is the
corporation having the greatest shareholders equity or, if no such
ultimate parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13, and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that the Principal Party, at its own expense, shall:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be
acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a prospectus complying
with the requirements of the Securities Act) until the Expiration Date,
and (C) as soon as practicable following the execution of such
agreement, take such action as may be required to assure that any
acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state securities or "blue sky" laws; and
(ii) as soon as practicable following the execution of such
agreement, deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its certificate of incorporation or bylaws or other instrument
20
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13; then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in a manner and for the securities described
in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company shall not
be required to issue fractions of Rights or to distribute Rights Certificates
which evidence fractional Rights. In lieu of issuing such fractional Rights,
there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by a majority of the Board
of Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
a majority of the Board of Directors shall be used and such determination shall
be described in a statement filed with the Rights Agent and the holders of the
Rights.
(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 such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock); provided, however, that in lieu of fractions of
shares of Preferred Stock which are integral multiples of one one- thousandth of
a share of Preferred Stock, the Company may provide for the issuance of
depositary receipts pursuant to Section 7(c) hereof. In lieu of such fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the then current market price of a share of Preferred
Stock on the day of exercise, determined in accordance with Section 11(d)
hereof.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or
21
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company
Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name
a Rights Certificate (or, prior to the Distribution Date, the
associated Company Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7 (e)
hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or any other Person as a
result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as
practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of shares of Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, except as provided in Section 24 hereof, to receive notice
of meetings or other actions affecting stockholders, or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof. This Section 17 shall also apply to holders, as such, of Rights prior to
the issuance of Rights Certificates.
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,
including reasonable fees and disbursements of its counsel, incurred in
connection with the
22
execution and administration of this Agreement and the exercise and performance
of its duties hereunder. The Company shall indemnify the Rights Agent for, and
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the reasonable costs and
expenses of defending against any claim of liability hereunder.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
shareholder services businesses of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any document or any further act on the part of any of
the parties hereto; provided, however, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman, the
Vice Chairman, the Chief Executive Officer, the President, the Chief Financial
Officer, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; provided, however, that so long as any Person is an Acquiring Person
hereunder, such certificate shall be signed and delivered by a majority of the
Board of Directors; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
23
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the validity
of this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or failure by the Company to
satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of the certificate
describing any such adjustment contemplated by Section 12); 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 any other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Preferred Stock or any other securities will, when
so issued, be validly authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman, the Vice Chairman, the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer; provided,
however, that so long as any Person is an Acquiring Person hereunder, the Rights
Agent shall accept such instructions and advice only from a majority of the
Board of Directors and shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with such instructions of a majority
of the Board of Directors. 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 such officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, 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 have a pecuniary interest in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been
24
completed, not signed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company. If
such certificate has been completed and signed and shows a negative response to
clauses 1 and 2 of such certificate, unless previously instructed otherwise in
writing by the Company (which instructions may impose on the Rights Agent
additional ministerial responsibilities, but no discretionary responsibilities),
the Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a Person described in Section 7(e) hereof and shall not be
charged with any knowledge to the contrary.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty days' prior notice in writing mailed to the Company, and to each transfer
agent of the Preferred Stock and the Company Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty days' prior notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Stock and the Company Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or any state of the United States
in good standing, shall be authorized under applicable laws to exercise
corporate trust or stock transfer powers and shall be subject to supervision or
examination by federal or state authorities or (b) an Affiliate of a corporation
described in clause (a). 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 Preferred Stock and the Company Common Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or the Rights to the contrary, the Company may, at
its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by a majority of the Board of Directors to reflect any adjustment or
change made in accordance with the provisions of this Agreement in the Purchase
Price or the number or kind or class of shares or other securities or property
that may be acquired under the Rights Certificates. In addition, in connection
with the issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Board of Directors, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section 30 hereof, the
Company may, at its option, by action of a majority of the Board of Directors,
at any time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date or (ii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such
25
redemption price being the "Redemption Price"). The Company may, at its option,
by action of a majority of the Board of Directors, pay the Redemption Price
either in shares of Company Common Stock (based on the "current market price",
as defined in Section 11(d) hereof, of the shares of Company Common Stock at the
time of redemption) or cash and the redemption of the Rights shall be effective
on the basis and with such conditions as the Board of Directors may in its sole
discretion establish.
(b) Immediately upon the action of a majority of the Board of Directors
ordering the redemption of the Rights, evidence of which shall be filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. 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. Promptly after the action of a
majority of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Company Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular quarterly cash dividend
paid out of funds legally available therefor), (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), (iv) to effect any consolidation or
merger into or with any other Person, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than a transfer by the Company and/or any of its
wholly owned Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 24, if any wholly owned Subsidiary of the
Company effects a consolidation or merger with or into, or effects a sale or
other transfer of assets or earnings power to, any other wholly owned Subsidiary
of the Company.
(b) In case any Triggering Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
or Section 13 hereof, as the case may be.
SECTION 25. NOTICES. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by telex,
telegram or cable) and mailed or sent or delivered, if to the Company, at its
address at:
JDS Uniphase Corporation
210 Baypoint Parkway
San Jose, California 95134
Attention: Chief Financial Officer
26
and if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Joseph Wolf
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. For so long as the Rights are then
redeemable, and, subject to the penultimate sentence of this Section 26, the
Company may, in its sole and absolute discretion, and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of certificates representing
Rights or shares of Company Common Stock; provided, however, that so long as
Furukawa and its Affiliates are collectively the Beneficial Owner of at least
five percent (5%) of the shares of Company Common Stock then outstanding, the
definition of "Acquiring Person" in this Agreement shall not be amended without
the prior written consent of Furukawa, acting reasonably. From and after the
time that the Rights are no longer redeemable and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that (x) this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 30
hereof, a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights, and (y) so long as Furukawa
and its Affiliates are collectively the Beneficial Owner of at least five
percent (5%) of the shares of Company Common Stock then outstanding, the
definition of "Acquiring Person" in this Agreement shall not be amended without
the prior written consent of Furukawa, acting reasonably. Upon the delivery of a
certificate from an appropriate officer of the Company or, so long as any Person
is an Acquiring Person hereunder, from the majority of the Board of Directors
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the contrary,
(i) no supplement or amendment shall be made which changes the Redemption Price,
the Purchase Price, the Expiration Date or the number of Units of Preferred
Stock or other securities or assets for which a Right is exercisable without the
approval of a majority of the Board of Directors, and (ii) following the
occurrence of a Section 11(a)(ii) Event, no supplement or amendment whatsoever
shall be made without the approval of the Board of Directors. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For all
purposes of this Agreement, any calculation of the number of shares of Company
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power
27
(i) to interpret the provisions of this Agreement, and (ii) to make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors or any member thereof to any liability to the holders of the Rights.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and a majority of the Board of Directors
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement
and the Rights shall not then be redeemable, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such determination by a
majority of the Board of Directors.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed entirely in such State.
SECTION 32. COUNTERPARTS. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. DESCRIPTIVE HEADINGS. The headings contained in this Agreement are
for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 34. EXCHANGE. (a) The Company, upon resolution of a majority of the
Board of Directors may, at its option, at any time after the first occurrence of
a Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to Section 7(e) hereof) for Units of Preferred Stock or shares of
Company Common Stock (at the election of the Board of Directors at an exchange
ratio of one Unit of Preferred Stock or one share of Company Common Stock, as
the case may be, per Right, as appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of shares
of Company Common Stock aggregating 50% or more of the shares of Company Common
Stock then outstanding. From and after the occurrence of a Section 13(a) Event,
any Rights that theretofore have not been exchanged pursuant to this Section
34(a) shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 34(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 action of a majority of the Board of Directors
ordering the exchange of any Rights pursuant to Section 34(a) 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 Units of Preferred Stock or shares of Company Common
Stock, as the case may be, equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of
28
any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange shall state the method by which the exchange of Units of Preferred
Stock or shares of Company Common Stock, as the case may be, for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock or Company
Common Stock, as the case may be, which are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit any
exchange of Rights as contemplated in accordance with this Section 34, the
Company, upon a resolution of a majority of the Board of Directors, shall take
all such action as may be necessary to authorize additional shares of Preferred
Stock or Company Common Stock, as the case may be, for issuance upon exchange of
the Rights or make adequate provision to substitute, in whole or in part, (1)
cash, (2) other equity securities of the Company, (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having an
aggregate value for each Right to be exchanged equal to the per share market
price of one Unit of Preferred Stock or share of Company Common Stock, as the
case may be (determined pursuant to Section 11(d) hereof) as of the date of a
Section 11(a)(ii) Event, where such aggregate value has been determined by a
majority of the Board of Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or fractions of shares of Company Common Stock or to distribute
certificates which evidence fractional Units or fractional shares. In lieu of
issuing fractional Units or fractional shares, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exchanged
as herein provided an amount in cash equal to the same fraction of the current
market price (determined pursuant to Section 11(d) hereof) of one Unit of
Preferred Stock or one share of Company Common Stock, as the case may be, on the
Trading Day immediately prior to the date of exchange pursuant to this Section
34.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
JDS UNIPHASE CORPORATION
By: /s/ ANTHONY R. MULLER
Anthony R. Muller
Executive Vice President, Chief
Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ HERB LEMMER
Herb Lemmer
General Counsel