other securities of another entity, cash, or other property or (iii) the Company sells or transfers fifty percent (50%) or more of its assets or earning power, then each holder of a Right (except for Rights that have previously been voided as set forth above) will have the right to receive, upon exercise of the Right and payment of the Purchase Price, in accordance with the terms of the Rights Agreement, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the Purchase Price.
Redemption of the Rights
The Rights will be redeemable at the Board’s sole discretion for $0.0001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board) (the “Redemption Price”) at any time prior to the event which causes a person or group of related persons to become an Acquiring Person. Immediately upon the action of the Board ordering redemption, the Rights will terminate and the only right of the holders of the Rights will be to receive the Redemption Price. The Redemption Price will be adjusted if the Company undertakes a stock dividend, a stock split or similar transaction.
Exchange Provision
At any time after the date on which a person beneficially owns fifteen percent (15%) or more of the Common Stock and prior to the acquisition by the person of fifty percent (50%) or more of the Common Stock, the Board may exchange the Rights (other than Rights owned by the Acquiring Person, which would have become void), in whole or in part, for Common Stock at an exchange ratio (subject to adjustment) of one share of Common Stock per Right (or, if insufficient shares are available, the Company may issue preferred stock, cash, debt or equity securities, property or a combination thereof in exchange for the Rights).
Amendment of Terms of Rights Agreement and Rights
For so long as the Rights are redeemable, the Company may supplement or amend any provision of the Rights Agreement (and can direct the Rights Agent to do so) without the approval of any holders of the Rights, including to make the provisions of the Rights Agreement inapplicable or otherwise alter, amend or supplement the terms of the Rights Agreement with respect to a particular transaction by which a person might otherwise become an Acquiring Person. At any time when the Rights are no longer redeemable, the Company may supplement or amend the Rights Agreement without the approval of any holders of Rights (and the Company may direct the Rights Agent to do so), provided that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b) cause the Rights Agreement again to become amendable other than in accordance with the provisions thereof or (c) cause the Rights again to become redeemable.
The Company is entitled to adopt and implement such procedures and arrangements (including with third parties) as it may deem necessary or desirable to facilitate the exercise, exchange, trading, issuance or distribution of Rights (and Preferred Stock) as contemplated in the Rights Agreement and to ensure that an Acquiring Person does not obtain the benefits thereof, and amendments in respect of the foregoing are not be deemed to adversely affect the interests of the holders of Rights. Neither the Company nor the Rights Agent may effect a supplement or amendment which changes the Redemption Price.
Supplements and amendments to the Rights Agreement become effective upon the Company’s execution thereof, whether or not also executed by the Rights Agent (but are not binding upon the Rights Agent until executed by the Rights Agent); provided, however, that to the extent a supplement or amendment adversely affects the Rights Agent’s own rights, duties, obligations or immunities under the Rights Agreement, such supplement or amendment is not effective against the Rights Agent without its express written consent.
Rights of Holders
Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.