Exhibit 3.2
DYNEGY INC.
FOURTH AMENDED AND RESTATED
BYLAWS
ARTICLE I
CORPORATE OFFICES
Section 1.
Delaware Registered Office.
The registered office of the corporation in the State of Delaware may, but need not, be identical with the principal office in the State of Delaware, and the address of the registered office may be changed from time to time by the board of directors.
Section 2.
Other Offices
.
The principal office of the corporation in the State of Delaware shall initially be located at the offices of CT Corporation System, 1209 Orange Street, Wilmington, Delaware 19801. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1.
Times and Places of Meetings.
Meetings of stockholders for any purpose may be held at such time and place, if any, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2.
Annual Meetings.
An annual meeting of the stockholders, for the election of directors and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as the board of directors shall each year fix.
Section 3.
Special Meetings.
Special meetings of stockholders may be called only by the chairman of the board of directors, the chief executive officer, the president, a majority of the board of directors, or the holders of not less than 20% of all the outstanding shares entitled to vote on the matter for which the meeting is called
.
The board of directors may postpone or reschedule any special meeting previously scheduled by the chairman of the board, board of directors, chief executive officer or president.
Section 4.
Notice of Meetings.
A notice stating the place, if any, day and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, or in the case of a meeting at which the stockholders are asked to consider a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty (20) nor more than sixty (60) days before the date of the meeting or as otherwise provided by law, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the corporation, with postage thereon prepaid.
When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken;
provided
,
however
, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, notice of the place, if any, date, and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
Section 5.
Waiver of Notice.
Whenever any notice whatsoever is required to be given under the provisions of the General Corporation Law of the State of Delaware (the “
DGCL
”) or the certificate of incorporation or these bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any meeting shall constitute waiver of notice thereof unless the person at the meeting objects to the holding of the meeting because proper notice was not given.
Section 6.
Record Date.
For the purpose of determining stockholders entitled to notice of any meeting of stockholders, or stockholders entitled to receive payment of any dividend, or to make a determination of stockholders for any other proper purpose (other than action by consent in writing without a meeting), the board of directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty (60) days and, for a meeting of stockholders, not less than ten (10) days, or in the case of a meeting at which the stockholders are asked to consider a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty (20) days, immediately preceding such meeting or other action. If the board of directors so fixes a record date for determining stockholders entitled to notice of any meeting, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the board of directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, the close of business on the day next preceding the date on which notice of the meeting is given (or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held) shall be the record date for such determination of stockholders. The provisions of this
Section 6
do not apply to the determination of the record date for stockholders entitled to consent to corporate action in writing without a meeting.
Section 7.
Voting Lists.
The officer or agent having charge of the transfer books for shares of the corporation shall make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for ten (10) days before such meeting, shall be kept on file at the principal place of business of the corporation or on a reasonably accessible electronic network (provided the information required to access such network is made available to stockholders) and shall be subject to inspection by any stockholder, and to copying at the stockholder’s expense, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original share ledger or transfer book, or a duplicate thereof kept in this State, shall be the only evidence as to who are the stockholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of stockholders.
Section 8.
Quorum.
A majority of the outstanding shares entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum for consideration of such matter at any meeting of stockholders;
provided
, that if less than a majority of such outstanding shares are represented at the meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice until a quorum shall attend. Where a separate vote by a class or series is required, a majority of the shares of such class or series represented in person or by proxy shall constitute a quorum to take the action with respect to that vote by that class or series on that matter. If a quorum is present, the affirmative vote of the majority of such shares represented at the meeting and entitled to vote on a matter shall be the act of the stockholders, unless the vote of a greater number or voting by classes is required by the DGCL, the certificate of incorporation or these bylaws. If a quorum fails to attend the meeting, the chairman of the meeting may adjourn the meeting to another place, if any, date or time.
Section 9.
Proxies.
Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after eleven (11) months from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot.
Section 10.
Voting of Shares.
Except as otherwise provided by the certificate of incorporation or by resolutions of the board of directors providing for the issue of any shares of preferred or special classes in series, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.
Section 11.
Voting of Shares by Certain Holders.
Shares registered in the name of another corporation, domestic or foreign, may be voted by any officer, agent, proxy or other legal representative authorized to vote such shares under the law
of incorporation of such corporation. The corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to vote such shares, together with any other person indicated and any other holder of an office indicated by the corporate stockholder to the corporation as a person or an office authorized to vote such shares. Such persons and offices indicated shall be registered by the corporation on the transfer books for shares and included in any voting list prepared in accordance with the DGCL and these bylaws. Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by such person’s administrator, executor or court-appointed guardian, either in person or by proxy, without a transfer of such shares into the name of such administrator, executor or court-appointed guardian. Shares registered in the name of a trustee may be voted by such trustee, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into the receiver’s name if authority so to do is contained in an appropriate order of the court by which such receiver was appointed. A stockholder whose shares are pledged may vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Shares of the corporation owned by the corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares entitled to vote at any given time, but shares of the corporation held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time.
Section 12.
Inspectors.
The board of directors, in advance of any meeting of stockholders, may appoint one or more persons as inspectors to act at such meeting or any adjournment thereof. If inspectors of election are not so appointed, the chairman of the meeting may, or upon the request of any stockholder shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the stockholders. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. For the avoidance of doubt, the provisions of this
Section 12
do not apply to the inspection of consents in writing to take corporate action and/or any revocation or revocations of such consents.
Section 13.
Voting by Ballot.
Voting on any question or in any election may be by voice vote unless the presiding officer shall order that voting be by ballot.
Section 14.
Organization of Meetings.
At each meeting of stockholders, one of the following persons shall act as chairman and shall preside thereat, in the following order of precedence: the chairman of the board of directors; the chief executive officer, president; any vice president acting in place of the president as provided by these bylaws; any person designated by the affirmative vote of the holders of a majority of the shares represented at the meeting in person or by proxy and entitled to vote.
Section 15.
Notice of Stockholder Business and Nominations
(A)
Annual Meetings of Stockholders.
(1)
Nominations of persons for election to the board of directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the corporation’s notice of meeting, (b) by or at the direction of the board of directors, (c) as expressly provided in the corporation’s certificate of incorporation, or (d) by any stockholder of record of the corporation at the relevant time,
provided
that stockholders of the common stock of the corporation (the
“
Common Stockholders
”
) comply with the notice procedures set forth in
Section 15(A) (2)-(3)
.
(2)
For nominations or other business to be properly brought before an annual meeting by a Common Stockholder, such stockholder must have given timely notice thereof in writing to the secretary of the corporation and such other business must be a proper matter for stockholder action. To be timely, the Common Stockholder’s notice shall be delivered to the secretary of the corporation at the principal executive offices of the corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the first anniversary of the preceding year’s annual meeting;
provided
,
however
, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the close of business on the 120th day before such annual meeting and not later than the close of business on the later of the 90th day before such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a Common Stockholder’s notice as described above. Such stockholder’s notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and Rule 14a-11 thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business described to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporations’ book and of such beneficial owner and (ii) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the corporation to solicit proxies for such annual meeting. The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation.
(3)
Notwithstanding anything in the second sentence of
Section 15(A)(2)
to the contrary and except with respect to the first annual meeting of the corporation, if the number of directors to be elected to the board of directors is increased and there is no public announcement naming the nominees for such new directors made by the corporation at least 100 days before the first anniversary of the preceding year’s annual meeting, a Common Stockholder’s notice required by this
Section 15
shall also be considered timely, but only with respect to nominees for any new positions for directors, if it is delivered to the secretary of the corporation at the principal executive offices of the corporation not later than the close of business on the 10th day following the day on which the corporation makes such public announcement.
(B)
Special Meetings of Stockholders.
Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to a notice of meeting given pursuant to
Section 4
of this
Article II
. Nominations of persons for election to the board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation’s notice of meeting (1) by or at the direction of the board of directors or (2) by any stockholder of the corporation who is a stockholder of record at the time of giving of notice provided for in this
Section 15
, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this
Section 15
. If the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the board of directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s notice of meeting, if the stockholder’s notice required by
Section 15(A)(2)
shall be delivered to the secretary of the corporation at the principal executive office of the corporation not earlier than the close of business on the 120th day before such special meeting and not later than the close of business on the later of the 90th day before such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.
(C)
General.
(1)
Only such persons who are nominated in accordance with the procedures set forth in this
Section 15
may be elected as directors and only such business may be conducted at a meeting of stockholders as has been brought before the meeting in accordance with the procedures set forth in this
Section 15
. Except as otherwise provided by law, the certificate of incorporation of the corporation or these bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in this
Section 15
and, if any proposed
nomination or business is not in compliance with this
Section 15
, to declare that such defective proposal or nomination shall be disregarded.
(2)
For purposes of this
Section 15
, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission (the “
SEC
”) under
Section 13
,
14
or
15(d)
of the Exchange Act.
(3)
Notwithstanding the foregoing provisions of this
Section 15
, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, if any, with respect to the matters set forth in this
Section 15
. Nothing in this
Section 15
shall be deemed to affect any rights of (i) stockholders to request inclusion of proposals in the corporation’s proxy statement under Rule 14a-8 (or any successor thereof) under the Exchange Act or (ii) the holders of any series of preferred shares of the corporation to elect directors under specified circumstances.
Section 16.
Stockholder Action Without Meetings.
(A)
Action by Written Consent.
Except as provided in the certificate of incorporation and subject to the requirements set forth in
Section 16(B)(C)
hereafter, any action required to be taken, or any action which may be taken, at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or to take such action under the provisions of the DGCL or the certificate of incorporation at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
(B)
Record Date.
In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting as provided for in
Section 16(A)
, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. Any stockholder of record of the corporation seeking to have the stockholders authorize or take corporate action by a consent in writing shall, by written notice to the secretary of the corporation, request the board of directors to fix a record date. The board of directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date (unless a record date has previously been fixed by the board of directors pursuant to the first sentence of this
Section 16(B))
. If no record date has been fixed by the board of directors pursuant to the first sentence of this paragraph or otherwise within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by applicable law, shall be the first date on which a signed consent in writing setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in Delaware or its principal place of business. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors pursuant to the first sentence of this
Section 16(B)
, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting if prior action by the board of directors is required by applicable law shall be at the close of business on the date on which the board of directors adopts the resolution taking such prior action.
(C)
Inspectors of Consent in Writing.
In the event of the delivery, in the manner provided by this
Section 16
and applicable law, to the corporation of the requisite consent or consents in writing to take corporate action and/or any revocation or revocations thereof, the corporation shall engage independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. No action by consent in writing without a meeting shall be effective until such date as either the secretary of the corporation or the independent inspectors certify to the corporation that the valid and unrevoked consents delivered to the corporation in accordance with
Section 16(A)-(B)
and applicable law
represent at least the minimum number of votes that would be necessary to take the corporate action under the provisions of the DGCL or the certificate of incorporation at a meeting at which all shares entitled to vote thereon were present and voted. Nothing contained in this
Section 16
shall in any way be construed to suggest or imply that the board of directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the secretary of the corporation or independent inspectors, or to take any other
action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).
(D)
Validity and Effectiveness of Written Consents.
Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days after the earliest dated written consent received in accordance with this
Section 16
, a valid written consent or valid written consents signed by a sufficient number of stockholders to take such action are delivered to the corporation in the manner prescribed in this
Section 16
and applicable law, and not revoked.
ARTICLE III
DIRECTORS
Section 1.
Powers.
The business and affairs of the corporation shall be managed by or under the direction of its board of directors.
Section 2.
Tenure and Qualifications.
Each director shall hold office until the next annual meeting of stockholders following such director’s election and until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. A director need not be a resident of the State of Delaware or a stockholder of the corporation. A director may resign at any time by giving written notice to the board of directors, or to the chairman of the board, chief executive officer, president or secretary of the corporation. A resignation shall be effective when the notice is given, unless the notice specifies a future date. In addition to the directors who the corporation’s stockholders elect, the board of directors may also designate, by resolution of the board of directors, one or more advisory directors who may attend all meetings of the board of directors, but may not vote on any matters before the board of directors. Except as set forth in this
Section 2
, the advisory director shall have no rights as a director either under these bylaws, the corporation’s charter, Delaware law or any other agreement to which the corporation is a party. Notwithstanding the foregoing, an advisory director shall be entitled to receive compensation for services as a director in the same amount and manner that such director would be entitled to receive compensation as an employee director or non-employee director, as the case may be, if such director were elected by the stockholders of the corporation.
Section 3.
Place of Meetings.
The board of directors may hold meetings, both regular and special, either within or without the State of Delaware.
Section 4.
Regular Meetings.
A regular meeting of the board of directors shall be held without other notice than this bylaw, immediately after, and at the same place as, the annual meeting of stockholders. Other regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board of directors.
Section 5.
Special Meetings.
Special meetings of the board of directors may be called only by the chairman of the board of directors or the lead director and shall be called by the chairman of the board of directors or the secretary upon the written request of any two directors.
Section 6.
Notice.
Notice of any special meeting shall be given: (i) at least five business days (or 12 hours, including at least four hours between 8:00 a.m. Central time and 6:00 p.m. Central time, if telephonic participation or participation by other electronic communication equipment is provided for with respect to the special meeting) prior thereto if the notice is given personally or by an electronic transmission, (ii) at least five business days (or two business days if telephonic participation or participation by other electronic communication equipment is provided for with respect to the special meeting) prior thereto if the notice is given by having it delivered by a third party entity that provides delivery services in the ordinary course of business and guarantees delivery of the notice to the director no later than the following business day, and (iii) at least seven business days prior thereto if the notice is given by mail For this purpose, the term “electronic transmission” may include a facsimile, email or other electronic means. Notice shall be delivered to the director’s business address and/or telephone number and shall be deemed given upon electronic transmission, upon delivery to the third party delivery service, or upon being deposited in the United States mail with postage thereon prepaid. Any director may waive notice of any meeting by signing a written waiver of notice either before or after the meeting. Attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except when a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.
Section 7.
Quorum; Vote Required, Actions Requiring Approval.
A majority of the directors then in office shall constitute a quorum for the transaction of business at any meeting of the board of directors, and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. If less than a majority of such number of directors are present at the meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.
Section 8.
Action by Unanimous Consent of Directors.
Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board of directors or such committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the board of directors or committee in accordance with applicable law.
Section 9.
Participation with Communications Equipment.
Members of the board of directors or of any committee of the board of directors may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting shall constitute attendance and presence in person at the meeting of the person or persons so participating.
Section 10.
Compensation of Directors.
The board of directors may fix the compensation of directors by the affirmative vote of a majority of the directors then in office and irrespective of any personal interest of any of its members. In addition, the directors may be paid their expenses, if any, of attendance at each meeting of the board of directors. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. The chairman of the board, the lead director, and members of special or standing committees may be compensated additionally for so serving.
Section 11.
Agenda Items.
No action may be taken at a meeting of the board of directors with respect to any matter that was not previously set forth on an agenda for such meeting delivered to the directors at least two business days before such meeting (or twelve (12) hours before such meeting, including at least four hours between 8:00 a.m. Central time and 6:00 p.m. Central time, if telephonic participation or participation by other electronic communication equipment is provided for with respect to the special meeting) if a majority of the directors present at such meeting oppose taking action at such meeting with respect to such matter.
Section 12.
Chairman of the Board.
The chairman of the board of directors, or in such person’s absence, the chief executive officer, or in the absence of both such persons, the president, shall preside at all meetings of the stockholders and the board of directors. The chairman of the board of directors shall be elected by the board of directors and shall hold the position until a successor is elected and qualified or until such chairman’s earlier resignation or removal. Any vacancy occurring in the position shall be filled by the board of directors for the unexpired portion of the term. The chairman of the board shall serve at the pleasure of the board of directors. Election of a chairman of the board shall not of itself create contract rights.
Section 13.
Lead Director.
At the board meeting associated with the annual meeting of stockholders each year, the non-management directors shall determine whether to designate a lead director to serve until the next annual board meeting. If the non-management directors determine to designate a lead director, such director shall be a non-management director selected by a majority of the non-management directors at such meeting. The chairman of the board may be selected to serve as the lead director if he or she meets the applicable independence and non-management criteria. The lead director shall have the power: to convene executive sessions of the non-management directors of the board of directors and shall coordinate, develop an agenda for, and moderate such sessions; to consult with the non-management directors and serve as a conduit to senior management of the corporation of the views of the non-management directors when the board of directors is not in session; to engage outside advisors to report to the board of directors or a committee thereof; to refer to the chairman of any committee of the board of directors matters within the scope of such committee’s authority; to confer with outside counsel, auditors and other advisors to the corporation; and to consult with the chairman of the board of directors regarding the agenda
of matters for meetings of the board of directors.
ARTICLE IV
COMMITTEES OF THE BOARD OF DIRECTORS
Section 1.
Establishment of Committees.
The board of directors may create one or more committees and appoint members of the board of directors to serve on the committee or committees. Each committee shall have two or more members, who serve at the pleasure of the board of directors. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Any vacancy in a committee may be filled by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors as required.
Section 2.
Manner of Acting.
Unless the appointment by the board of directors requires a greater number, a majority of any committee shall constitute a quorum and a majority of a quorum shall be necessary for action by any committee. A committee may act by unanimous consent in writing without a meeting. Each committee, by majority vote of its members, shall determine the time and place of meetings and the notice required therefor.
Section 3.
Authority of Committees.
To the extent specified by resolution of the board of directors and these bylaws, each committee may exercise the authority of the board of directors,
provided
,
however
, a committee may not:
(A) authorize distributions, except for dividends to be paid with respect to shares of any preferred or special classes or any series thereof;
(B) approve or recommend to stockholders any act requiring the approval of stockholders under applicable law;
(C)
fill vacancies on the board of directors or any committee;
(D) elect or remove officers or fix the compensation of any member of the committee;
(E) adopt, amend or repeal these bylaws;
(F) approve a plan of merger not requiring stockholder approval;
(G) authorize or approve reacquisition of shares, except according to a general formula or method prescribed by the board of directors;
(H) authorize or approve the issuance or sale, or contract for sale, of shares, or determine the designation and relative rights, preferences, and limitations of a series of shares, except the board of directors may direct that a committee may fix the specific terms of the issuance or sale or contract for sale, or the number of shares to be allocated to particular employees under an employee benefit plan; or
(I) amend, alter, repeal, or take action inconsistent with any resolution or action of the board of directors when the resolution or action of the board of directors provides by its terms that it shall not be amended, altered or repealed by action of a committee.
Section 4.
(A)
Compensation and Human Resources Committee.
As required by the applicable listing standards of the NYSE, as amended, the board of directors shall maintain a Compensation and Human Resources Committee consisting of directors who are not otherwise employed by the corporation. The Compensation and Human Resources Committee shall review from time to time, the salaries, compensation and employee benefits for the executive officers and employees of the corporation and make recommendations to the board of directors concerning such matters. The Compensation and Human Resources Committee shall be responsible for all aspects of the Company’s stock plans, including plan administration, and shall review and recommend to the board of directors new plans or changes to current plans, including increasing the number of shares reserved for such plans.
(B)
Corporate Governance and Nominating Committee.
As required by the applicable listing standards of the NYSE, as amended, the board of directors shall maintain a Corporate Governance and Nominating Committee consisting of directors who are not otherwise employed by the corporation. The Corporate Governance and Nominating Committee shall consider matters related to corporate governance, develop general criteria regarding the selection and qualifications for members of the board of directors and recommend candidates for election to the board of directors.
(C)
Audit and Compliance Committee.
As required by the applicable listing standards of the NYSE, as amended, the board of directors shall maintain an Audit and Compliance Committee consisting of independent, “disinterested” directors. The Audit and Compliance Committee shall review the selection and qualifications of the independent public accountants employed by the corporation to audit the financial statements of the corporation and the scope and adequacy of their audits, consider recommendations made by such independent public accountants, review internal financial audits of the corporation, and report any additions or changes it deems necessary to the board of directors.
ARTICLE V
OFFICERS
Section 1.
Officers.
The officers of the corporation shall consist of a chief executive officer, president, one or more vice presidents (the number, seniority and any other designations thereof to be determined by the board of directors), a secretary, a treasurer, a controller, and such other officers as may be elected by the board of directors. Any two or more offices may be held by the same person.
Section 2.
Additional Officers and Agents.
The board of directors may appoint such other officers and agents as it deems necessary, who shall exercise such powers and perform such duties as shall be determined from time to time by the board of directors.
Section 3.
Compensation of Officers.
The compensation of all officers of the corporation shall be fixed by or under the direction of the board of directors. No officer shall be prevented from receiving such compensation because such officer is also a director of the corporation.
Section 4.
Term of Office and Vacancy.
Each elected officer shall hold office until a successor is elected and qualified or until such officer’s earlier resignation or removal. Any vacancy occurring in any office of the corporation shall be filled by the board of directors for the unexpired portion of the term. Each appointed officer shall serve at the pleasure of the board of directors. Election or appointment of an officer or agent shall not of itself create contract rights.
Section 5.
Removal.
Any officer or agent may be removed by the board of directors, with or without cause, whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.
Section 6.
Chief Executive Officer.
The chairman of the board of directors may, but need not, be the chief executive officer of the corporation. The chief executive officer shall (a) determine and administer the policies of the corporation, subject to the instructions of the board of directors; (b) be authorized to execute all documents in the name and on behalf of the corporation; and (c) perform all duties incident to the office of chief executive officer and such other duties as the board of directors or bylaws may from time to time prescribe.
Section 7.
President.
The president shall (a) be the chief operating officer of the corporation, and shall in general be in charge of the operations of the corporation, subject to the control of the board of directors; (b) be authorized to execute all documents in the name and on behalf of the corporation; and (c) perform all duties incident to the office of president and such other duties as the board of directors may from time to time prescribe.
Section 8.
Vice Presidents.
In the absence of the president or in the event of the inability or refusal of the president to act, the vice president (or if there is more than one vice president, the vice presidents in the order of seniority of title, or in the event of equal seniority, then in the order designated, or in the absence of any designation, then in the order named in the most recent resolution providing for the annual election of officers) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Any vice president shall perform
such other duties and have such other powers as the board of directors or the chief executive officer or president may from time to time prescribe.
Section 9.
Secretary.
The secretary shall (a) attend meetings of the board of directors and meetings of the stockholders and record minutes of the proceedings of the meetings of the stockholders and of the board of directors, and when required, shall perform like duties for the committees of the board of directors; (b) assure that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (c) maintain custody of the corporate records of the corporation; (d) keep or cause to be kept a register of the post office address of each stockholder as furnished to the secretary by such stockholder; (e) sign with the chief executive officer, president or a vice president certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the board of directors; (f) have charge of the stock transfer books of the corporation and authority over a stock transfer agent, if any; (g) certify copies of the bylaws, resolutions of the stockholders and board of directors and committees thereof and other documents of the corporation as true and correct copies thereof; and (h) perform all duties incident to the office of secretary and such other duties as the board of directors or the chief executive officer or president may from time to time prescribe.
Section 10.
Assistant Secretaries
.
The assistant secretary, or if there is more than one, the assistant secretaries, respectively, as authorized by the board of directors, may sign with the president or a vice president certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the board of directors, and shall, in the absence of the secretary or in the event of the inability or refusal of the secretary to act, perform the duties and exercise the powers of the secretary, and shall perform such other duties as the board of directors, chief executive officer, president or secretary may from time to time prescribe.
Section 11.
Treasurer.
The treasurer shall (a) have custody of the funds and securities of the corporation; (b) deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors; (c) maintain adequate accounts of the corporation; (d) disburse the funds of the corporation as may be ordered by the board of directors; (e) submit financial statements to the president and the board of directors; and (f) perform all duties incident to the office of treasurer and such other duties as the board of directors or the chief executive officer or president may from time to time prescribe.
Section 12.
Assistant Treasurers.
The assistant treasurer, or if there is more than one, the assistant treasurers, respectively, as authorized by the board of directors, shall, in the absence of the treasurer or in the event of the inability or refusal of the treasurer to act, perform the duties and exercise the power of the treasurer and shall perform such other duties and have such other power as the board of directors, the chief executive officer, president or treasurer may from time to time prescribe.
Section 13.
Controller.
The controller shall conduct the accounting activities of the corporation, including the maintenance of the corporation’s general and supporting ledgers and books of account, operating budgets, and the preparation and consolidation of financial statements.
Section 14.
General Powers of Officers.
The chief executive officer, president, any executive vice president, senior vice president or any vice president, may sign without countersignature or attestation any deeds, mortgages, bonds, contracts, reports to public agencies, or other instruments whether or not the board of directors has expressly authorized execution of such instruments, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws solely to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed. Any other officer of this corporation may sign contracts, reports to public agencies, or other instruments which are in the regular course of business and within the scope of such officer’s authority, except where the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed.
Section 15.
Delegation of Authority.
The board of directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
ARTICLE VI
CONTRACTS, CHECKS AND DEPOSITS
Section 1.
Contracts.
The board of directors may authorize any officer or officers, or agent or agents, to enter into any contract and execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.
Section 2.
Checks, Drafts, Notes.
All checks, drafts or other orders for the payment of money, notes and other evidences of indebtedness, issued in the name of the corporation, shall be signed by such officer or officers, or agent or agents, of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors.
Section 3.
Deposits.
All funds of the corporation other than petty cash shall be deposited to the credit of the corporation in such banks, trust companies or other depositories as the board of directors may select.
Section 4.
Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these bylaws, facsimile signatures of any officer or officers of the corporation may be used whenever and as authorized by the board of directors or a committee thereof.
Section 5.
Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the board of directors, and each officer of the corporation shall, in the performance of such person’s duties, be fully protected in relying in good faith upon the books of account or other records of the corporation and upon such information, opinions, reports or statements presented to the corporation by any of its officers or employees, or committees of the board of directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation.
ARTICLE VII
SHARES
Section 1.
Issued Shares.
The issued shares of the corporation may be represented by certificates, or may be uncertificated shares, in either case in whole or in part, as determined and authorized by the board of directors.
Section 2.
Certificates for Shares.
Certificates representing shares of the corporation shall be in such form as may be determined by the board of directors. Such certificates shall be signed by the president or vice president and by the secretary or an assistant secretary. Any signatures or countersignature on the certificate may be facsimiles. If any officer of the corporation, or any officer or employee of the transfer agent or registrar, who has signed or whose facsimile signature has been placed upon such certificate ceases to be an officer of the corporation, or an officer or employee of the transfer agent or registrar, before such certificate is issued, the certificate may be issued by the corporation with the same effect as if the officer of the corporation, or the officer or employee of the transfer agent or registrar, had not ceased to be such at the date of its issue. Certificates for shares shall be individually numbered or otherwise individually identified. Each certificate for shares shall state the name of the registered owner of the shares in the stock ledger, the number and the class and series, if any, of such shares, and the date of issuance of the certificate. If the corporation is authorized to issue more than one class of stock, a full summary or statement of all of the designations, preferences, qualifications, limitations, restrictions, and special or relative rights of each class authorized to be issued, and, if the corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences among such series, shall be set forth upon the face or back of the certificate. Such statement may be omitted if it shall be set forth upon the face or back of the certificate that such statement, in full, will be furnished by the corporation to any stockholder upon request and without charge.
Section 3.
Uncertificated Shares.
The board of directors may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, and may provide an election by individual stockholders to receive certificates or uncertificated shares and the conditions of such election, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the registration of issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to the DGCL or these bylaws. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and rights
and obligations of the holders of certificates representing shares of the same class and series shall be identical.
Section 4.
Registration of Transfers of Shares.
Transfers of shares shall be registered in the records of the corporation upon request by the registered owner thereof in person or by a duly authorized attorney, upon presentation to the corporation or to its transfer agent (if any) of a duly executed assignment and other evidence of authority to transfer, or proper evidence of succession, and, if the shares are represented by a certificate, a duly endorsed certificate or certificates for shares surrendered for cancellation, and with such proof of the authenticity of the signatures as the corporation or its transfer agent may reasonably require. The Person in whose name shares are registered in the stock ledger of the corporation shall be deemed the owner thereof for all purposes as regards to the corporation.
Section 5.
Lost Certificates.
The corporation may issue a new share certificate in the place of any certificate theretofore issued by it, alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact, by the person claiming the share certificate to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or certificates the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or the owner’s legal representative, to advertise the same in such manner as it shall require or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate or certificates alleged to have been lost, stolen or destroyed.
ARTICLE VIII
OTHER PROVISIONS
Section 1.
Distributions.
The board of directors may authorize, and the corporation may make, distributions to its stockholders, subject to any restriction in the certificate of incorporation and subject to any limitations provided by law.
Section 2.
Fiscal Year.
The fiscal year of the corporation shall be fixed, and shall be subject to change, by the board of directors.
Section 3.
Seal.
The board of directors may, but shall not be required to, provide by resolution for a corporate seal, which may be used by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.
ARTICLE IX
EMERGENCY BYLAWS
Section 1.
Emergency Board of Directors.
If a quorum of the board of directors cannot readily be convened for action due to (a) an attack or imminent attack on the United States or any of its possessions, (b) any nuclear or atomic disaster, or (c) any other catastrophe or similar emergency condition, the vacant director positions shall be filled by the following persons (provided in each case such person is not already a director and is willing and able to serve) in the following order: the president, the vice presidents in order of seniority, the treasurer, the secretary, any other officers in order of seniority and any other persons in such order as named by the board of directors on any list as it may compile from time to time for purposes of appointing such successor directors. Such new board of directors shall be referred to as the emergency board of directors. The initial Chairman of the board of the emergency board of directors (
“
Chairman
”
) shall be the regularly-elected director, if any, who has served on the board of directors for the longest period of time and, if all directors on the emergency board of directors are successor directors appointed pursuant to this
Section 1
, the Chairman shall be determined according to the same order of priority as such successor directors are appointed pursuant to this
Section 1
. The directors appointed pursuant to this
Section 1
shall serve until the next annual or special meeting of stockholders at which directors are to be elected or until the emergency condition shall have terminated.
Section 2.
Powers.
The emergency board of directors shall have all of the rights, powers and duties of the board of directors except such emergency board of directors may not amend the certificate of incorporation of the corporation nor approve a merger, sale of all or substantially all of the assets of the corporation, liquidation or dissolution.
Section 3.
Notice of Meetings.
Notice of any meeting of the emergency board of directors held during any emergency described in
Section 1
of this
Article IX
may be given only to such directors or successor directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio.
Section 4.
Liability.
No officer, director or employee of the corporation acting in accordance with this
Article IX
shall be liable to the corporation, except for willful misconduct.
Section 5.
Bylaws.
To the extent not inconsistent with this
Article IX
, the bylaws of the corporation shall remain in effect during any emergency described in
Section 1
of this
Article IX
.
Section 6.
Interpretation.
If, by operation of law or otherwise, any of the provisions of this
Article IX
are deemed to be invalid or not controlling, such provisions shall be construed by any court or agency having competent jurisdiction as a determinative factor evidencing the intent of the corporation.
ARTICLE X
AMENDMENTS
Subject to the provisions of the certificate of incorporation, these bylaws may be altered, amended or repealed, and new bylaws may be adopted, by the board of directors;
provided
that no amendment or repeal of
Article III
,
Section 6
or
11
,
Article IV
,
Section 1
,
or
Article IX
,
Section 1
,
nor
this
Article X
, shall be effective except upon the approval of the affirmative vote of a majority of the entire number of directors then in office. Subject to the provisions of the certificate of incorporation, these bylaws may also be altered, amended or repealed by the stockholders of the corporation.
ARTICLE XI
INDEMNIFICATION OF EMPLOYEES AND AGENTS
The corporation may indemnify any agent or employee of the corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (including any such proceeding by or in the right of the corporation) whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was serving the corporation at its request and in the course and scope of such person’s duties and acting in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the corporation, against expenses (including reasonable attorney’s fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action, suit or proceeding.
Exhibit 4.1
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “
Agreement
”) is made as of October 1, 2012 by and among Dynegy Inc., a Delaware corporation (as reorganized following the Merger, the “
Company
”), and the parties identified as the “
Investors
” on the signature page hereto if such party, together with its Affiliates, Beneficially Owns as of the Effective Date Registrable Securities representing at least 10% of the then issued and outstanding New Common Stock and any parties identified on the signature pages of any joinder agreements executed and delivered pursuant to
Section 10
and
Section 11
hereof (each, including the Investor, a “
Holder
” and, collectively, the “
Holders
”). Capitalized terms used but not otherwise defined herein are defined in
Section 13
hereof.
R E C I T A L S
:
WHEREAS the Company proposes to issue the New Common Stock pursuant to, and upon the terms set forth in, the Joint Chapter 11 Plan of Reorganization of Dynegy Holdings, LLC (“
DH
”) and the Company under chapter 11, title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “
Plan
”);
WHEREAS pursuant to the Plan, on or prior to the date on which the Plan becomes effective (such date, the “
Effective Date
”), the pre-Merger Dynegy Inc. and DH shall be merged (the “
Merger
”), the Company shall be the surviving entity of the Merger and, by virtue of the Merger, all DH equity interests issued and outstanding immediately prior to the effective time of the Merger will be cancelled;
NOW, THEREFORE, in accordance with the Plan, and in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Holders hereby agree as follows:
Section 1.
Shelf Registrations
.
(a)
Filing
. The Company shall, as soon as commercially reasonable, but in any event not later than 90 days after the Effective Date, file a registration statement on any permitted form that qualifies, and is available for, the resale of Registrable Securities, with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect) (the “
Shelf
”). The Company shall use its commercially reasonable efforts to cause the Shelf to become effective as promptly thereafter as practicable. The Company shall give written notice of the expected filing of the Shelf (the “
Registration Notice
”) at least 20 Business Days prior to the filing thereof to all parties identified on the signature pages hereto or any signature pages of any joinder agreements delivered pursuant to
Sections 10
and
11
hereof and the Company shall include in the Shelf all Registrable Securities with respect to which the Company has received written requests for inclusion therein at least 5 Business Days prior to the date of filing indicated in the Registration Notice; provided, however, that, in order to be named as a selling securityholder, each Holder must furnish to the Company in writing such information as may be reasonably requested by the Company for the purpose of including such Holder’s Registrable Securities in the Shelf (the “
Selling Holder Information
”)
1
within the time period set forth above. The Company shall include, in the Shelf, Selling Holder Information received to the extent necessary and in a manner so that, upon effectiveness of the Shelf, any such Holder shall be named, to the extent required by the rules promulgated under the Securities Act by the Commission, as a selling securityholder and be permitted to deliver (or be deemed to deliver) a Prospectus relating to the Shelf to purchasers of the Registrable Securities in accordance with applicable law, and shall, if requested, within two Business Days of any request, amend or supplement the Shelf such that the plan of distribution or other related information reflects transactions proposed to be conducted by any Holder. If the Company files an amended version of the Shelf, the Company shall include in such Shelf the Selling Holder Information that was not included in any previous filed version of the Shelf. The Company shall use its commercially reasonable efforts to convert any Shelf that is on a Form S-1 (including any Follow-On Shelf) to a Registration Statement on Form S-3 (the “
Form S-3 Shelf
”) as soon as practicable after the Company is eligible to use Form S-3. If any Registrable Securities remain issued and outstanding after three years following the initial effective date of such Shelf (the “
Initial Shelf Effective Date
”), the Company shall either (x) in the case of a Form S-3 Shelf, file prior to the expiration of such Shelf, or (y) otherwise, no less than 90 days prior to the expiration of such Shelf, file a new Shelf covering such Registrable Securities and shall thereafter use its commercially reasonable efforts to cause to be declared effective as promptly as practical, such new Shelf. The Company shall maintain the effectiveness of the Shelf in accordance with the terms hereof for a period ending on the date on which all Registrable Securities covered by such Shelf have been sold pursuant to such Shelf or have otherwise ceased to be Registrable Securities; provided that if no Holder (taken together with its Affiliates) Beneficially Owns more than 10% of the then outstanding New Common Stock, the Company shall only be obligated to maintain the effectiveness of the Shelf until the five-year anniversary of the effective date of the Shelf.
(b)
Requests for Underwritten Shelf Takedowns
. At any time prior to five years after the Effective Date and from time to time after the later of (i) when the Shelf has been declared effective by the Commission and (ii) 210 days after the Effective Date, any one or more Holders of Registrable Securities may request to sell all or any portion of their Registrable Securities in an underwritten offering that is registered pursuant to the Shelf (each, an “
Underwritten Shelf Takedown
”);
provided
that in the case of each such Underwritten Shelf Takedown such Holder or Holders will be entitled to make such demand only if (x) the total amount of Registrable Securities requested to be sold by such Holder or Holders in such offering is reasonably expected to exceed 5% of the then issued and outstanding New Common Stock of the Company or (y) the total offering price of such request is reasonably expected to exceed $250 million; in each case, including piggyback shares and before the deduction of underwriting discounts.
(c)
Requests for Non-Underwritten Shelf Takedowns
. If a Holder desires to initiate an offering or sale of all or part of such Holder’s Registrable Securities that does not constitute an Underwritten Shelf Takedown (a “Non-Underwritten Shelf Takedown”), such Holder shall so indicate in a written request delivered to the Company no later than two Business Days (or in the event any amendment or supplement to the Shelf is necessary, no later than five Business Days) prior to the expected date of such Non-Underwritten Shelf Takedown, which request shall include (i) the total number of Registrable Securities expected to be offered and
2
sold in such Non-Underwritten Shelf Takedown, (ii) the expected plan of distribution of such Non-Underwritten Shelf Takedown and (iii) the action or actions required (including the timing thereof) in connection with such Non-Underwritten Shelf Takedown (including the delivery of one or more stock certificates representing shares of Registrable Securities to be sold in such Non-Underwritten Shelf Takedown), and, to the extent necessary, the Company shall file and effect an amendment or supplement to its Shelf for such purpose as soon as practicable;
provided
,
however
, that the Company shall not be required to file an amendment or supplement to its Shelf within 30 days of a previous amendment or supplement with respect to a Non-Underwritten Shelf Takedown. For the avoidance of doubt, unless otherwise agreed to by the requesting selling Holder, no other Holder shall have the right to participate in a Non-Underwritten Shelf Takedown.
(d)
Demand Notices
. All requests (a “
Demand
”) for Underwritten Shelf Takedowns shall be made by the Holder making such request (the “
Demand Holder
”) by giving written notice to the Company (the “
Demand Notice
”). Each Demand Notice shall specify the approximate number of Registrable Securities to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. Within five Business Days after receipt of any Demand Notice, the Company shall send written notice of such requested Underwritten Shelf Takedown to all other Holders of Registrable Securities (the “
Company Notice
”) and, subject to the provisions of
Section 1(e)
below, shall include in such Underwritten Shelf Takedown all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 7 Business Days after sending the Company Notice.
(e)
Priority on Underwritten Shelf Takedowns
. The Company shall not include in any Underwritten Shelf Takedown any securities which are not Registrable Securities without the prior written consent of the Holders of a majority of the Registrable Securities requested to be included in the Underwritten Shelf Takedown. If the managing underwriters for such Underwritten Shelf Takedown advise the Company in writing that in their opinion the number of Registrable Securities and, if permitted hereunder, Other Securities requested to be included in such Underwritten Shelf Takedown exceeds the number of Registrable Securities and Other Securities, if any, which can be sold in an orderly manner in such offering within a price range acceptable to the Holders of a majority of the Registrable Securities requested to be included in the Underwritten Shelf Takedown, the Company shall include in such Underwritten Shelf Takedown the number of Registrable Securities which can be so sold in the following order of priority: (i)
first
, the Registrable Securities requested to be included in such Underwritten Shelf Takedown by the Holders, which in the opinion of such underwriter can be sold in an orderly manner within the price range of such offering,
pro rata
among the respective Holders of such Registrable Securities on the basis of the number of Registrable Securities held by each such Holder, and (ii)
second
, Other Securities, including Company Held Securities that the Company proposes to register for its own account, requested to be included in such Underwritten Shelf Takedown to the extent permitted hereunder.
3
(f)
Restrictions on Underwritten Shelf Takedowns and Use of Registration Statement
.
(i)
The Company shall not be obligated to effect more than two Underwritten Shelf Takedowns during any period of 12 consecutive months and shall not be obligated to effect an Underwritten Shelf Takedown within 120 days after the pricing of a previous Underwritten Shelf Takedown;
provided
, that, if such Underwritten Shelf Takedown is terminated by any stop order, injunction, or other order of the Commission or if the conditions to closing specified in any underwriting agreement or any other agreement entered into in connection with such Underwritten Shelf Takedown are not satisfied, other than by reason of some act or omission by a Holder, such Underwritten Shelf Takedown will be deemed not to have been in effect and will not count as an Underwritten Shelf Takedown for purposes of the limitations in this
Section 1(f)(i)
.
(ii)
Upon written notice to the Holders of Registrable Securities, the Company shall be entitled to suspend, for a period of time (each, a “
Suspension Period
”), the use of any Registration Statement or Prospectus and shall not be required to amend or supplement the Registration Statement, any related Prospectus or any document incorporated therein by reference if the Company determines in its reasonable good faith judgment that the Registration Statement or any Prospectus may contain an untrue statement of a material fact or may omit any fact necessary to make the statements in the Registration Statement or Prospectus not misleading;
provided
, that (A) there are no more than three Suspension Periods in any 12-month period, (B) the duration of any one Suspension Period may not exceed 60 days, (C) the duration of all Suspension Periods in any 12-month period may not exceed 90 days and (D) the Company shall use its good faith efforts to amend the Registration Statement and/or Prospectus to correct such untrue statement or omission as promptly as reasonably practicable, unless such amendment would reasonably be expected to have an adverse effect on the Company with respect to any proposal or plan of the Company to effect a merger, acquisition, disposition, financing, reorganization, recapitalization or similar transaction or any negotiations, discussions or pending proposals with respect thereto.
(g)
Piggyback Registration Rights.
(i)
In the event that the Company, including if the Company qualifies as a well-known seasoned issuer (within the meaning of Rule 405 under the Securities Act) (a “
WKSI
”), proposes to file (i) a prospectus supplement to an effective shelf registration statement (a “
Shelf Registration Statement
”), or (ii) a registration statement, other than a shelf registration statement for a delayed or continuous offering pursuant to Rule 415 under the Securities Act, in either case, for the sale of shares of New Common Stock for its own account, or for the benefit of the holders of any of its securities other than the Holders, to an underwriter on a firm commitment basis for reoffering to the public or in a “bought deal” or “registered direct offering” with one or more investment banks (collectively, a “Piggyback Takedown”), the Company shall at each such time give prompt written notice (the “
Piggyback Notice
”) to each Holder of the Registrable Securities of its intention to effect such Piggyback Takedown. Upon
4
the written request of any Holder made within 5 Business Days after receipt of the Piggyback Notice by such Holder (which request shall specify the number of Registrable Securities intended to be disposed of and the intended method of disposition of such Registrable Securities), subject to the other provisions of this Agreement, the Company shall include in such Piggyback Takedown all Registrable Securities (of the same class of New Common Stock as is proposed to be registered in the Piggyback Takedown) which the Company has been so requested to register; provided that the Company shall only be required to effect such registration with respect to any Holder if the Demand Holder has made a written request of the Company to effect a registration of Registrable Securities in accordance with this sentence. Notwithstanding anything to the contrary contained in this
Section 1(g)
, the Company shall not be required to proceed with any Piggyback Takedown incidental to the registration of any of its securities on Forms S-4 or S-8 (or any similar or successor form providing for the registration of securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans) or any other form that would not be available for registration of Registrable Securities.
(ii)
Determination Not to Effect Registration. If at any time after giving such Piggyback Notice and prior to the effective date of the registration statement filed in connection with such registration the Company shall decide (including the withdrawal by the Demand Holder exercising a Demand) not to proceed with any Piggyback Takedown, the Company may, at its election, give written notice of such determination to the selling Holders and thereupon the Company shall be relieved of its obligation to proceed with any Piggyback Takedown, without prejudice, however, to the right of the Demand Holder (or any Person to whom a Demand Holder has transferred Registrable Securities together with the right to participate in the exercise of Demands pursuant to
Section 1(d)
and/or participate in a Piggyback Takedown), immediately to request that such registration be effected as a registration under
Section 1
to the extent permitted thereunder.
(iii)
Priority on Primary Piggyback Takedowns. If a Piggyback Takedown is to be an underwritten registration on behalf of the Company, and the lead underwriter or managing underwriter advises the Company in writing that, the number of Other Securities and Registrable Securities requested to be included in such Piggyback Takedown exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Company, in its sole discretion, the Company shall include in such Piggyback Takedown the number of Registrable Securities which can be sold in the following order of priority: (a) first, all Company Held Securities; (b) second, the Registrable Securities requested to be included in such Piggyback Takedown pursuant to this
Section 1(g)
and the terms of any other registration rights agreement to which the Company is a party that can be sold without having the adverse effect referred to above, pro rata among the respective Holders of such
5
Registrable Securities on the basis of the number of Registrable Securities held by such Holder; and (c) third, Other Securities requested to be included in such Piggyback Takedown pursuant to this
Section 1(g)
and the terms of any other registration rights agreement to which the Company is a party that can be sold without having the adverse effect referred to above, pro rata on the basis of the relative number of such Other Securities owned by the Persons requesting to be included in such Piggyback Takedown.
(iv)
Priority in Secondary Piggyback Takedowns. If a Piggyback Takedown is to be an underwritten registration other than on behalf of the Company, and the lead underwriter or managing underwriter advises the Persons participating in such Piggyback Takedown that, in such firm’s good faith view, the number of Registrable Securities and Other Securities requested to be included in such Piggyback Takedown exceeds the number which can be sold in such offering without being likely to have a significant adverse effect upon the price, timing or distribution of the offering and sale of the Registrable Securities and Other Securities then contemplated, the Company shall include in such Piggyback Takedown the number of Registrable Securities which can be sold in the following order of priority: (A) first, the Registrable Securities requested to be included in such Piggyback Takedown by the Holders, which in the opinion of the managing underwriter can be sold in an orderly manner within the price range of such Piggyback Takedown, pro rata among the respective Holders of such Registrable Securities on the basis of the total number of Registrable Securities held by each such Holder; (B) second, Other Securities (other than Company Held Securities) that are requested to be included in such Piggyback Takedown pursuant to this
Section 1(g)
and the terms of any other registration rights agreement to which the Company is a party that can be sold without having the adverse effect referred to above, pro rata on the basis of the relative number of such Other Securities owned by the Persons seeking to be included in such Piggyback Takedown; and (C) third, Company Held Securities.
(v)
Expiration
. Notwithstanding any other provision of this Agreement, the right of any Holder to participate in a Piggyback Takedown shall expire at the earlier of (x) the five-year anniversary of the Shelf or (y) such time as all Registrable Securities held by such Holder are eligible to be sold to the public pursuant to Rule 144(b)(1) under the Securities Act without limitations with respect to the volume or manner of sale restrictions set forth therein.
(h)
Selection of Underwriters
. The Holders of a majority of the Registrable Securities requested to be included in an Underwritten Shelf Takedown shall have the right to select the investment banker(s) and manager(s) to administer the offering (which shall consist of one or more reputable, nationally recognized investment banks), subject to the Company’s approval, which shall not be unreasonably withheld, conditioned or delayed.
(i)
Automatic Shelf Registration
. Upon the Company becoming a Well-Known Seasoned Issuer, (i) the Company shall give written notice to all of the Holders as promptly as practicable, but in no event later than 10 Business Days thereafter, and such notice
6
shall describe, in reasonable detail, the basis on which the Company has become a Well-Known Seasoned Issuer, and (ii) the Company shall, as promptly as practicable, register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities in accordance with the terms of this Agreement. The Company shall use its commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable and to cause such Automatic Shelf Registration Statement to remain effective thereafter until the date on which all Registrable Securities have been sold pursuant to the Automatic Shelf Registration Statement or have otherwise ceased to be Registrable Securities; provided that if no Holder (taken together with its Affiliates) holds more than 10% of the then outstanding New Common Stock, the Company shall only be obligated to maintain the effectiveness of the Automatic Shelf Registration Statement until the five-year anniversary of the effective date of the Shelf. The Company shall give written notice of filing such Automatic Shelf Registration Statement to all of the Holders as promptly as practicable thereafter. If at any time after the filing of an Automatic Shelf Registration Statement by the Company the Company is no longer a Well-Known Seasoned Issuer (the “
Determination Date
”), the Company shall, within 10 Business Days after such Determination Date, (A) give written notice thereof to all of the Holders and (B) file a Registration Statement on an appropriate form (or a post-effective amendment converting the Automatic Shelf Registration Statement to an appropriate form) covering all of the Registrable Securities, and use its commercially reasonable efforts to have such Registration Statement declared effective as promptly as practicable after the date the Automatic Shelf Registration Statement is no longer useable by the Holders to sell their Registrable Securities.
(j)
Additional Selling Stockholders and Additional Registrable Securities
.
(i)
If the Company is not a Well-Known Seasoned Issuer, as soon as reasonably practicable and, in any event, within 45 Business Days after a written request by one or more Holders of Registrable Securities to register for resale any additional Registrable Securities owned by such Holders, the Company shall file a Registration Statement substantially similar to the Shelf then effective, if any (each, a “
Follow-On Shelf
”), to register for resale such Registrable Securities. The Company shall give written notice (the “
Follow-On Registration Notice
”) of the filing of the Follow-On Shelf at least 20 Business Days prior to filing the Follow-On Shelf to all Holders of Registrable Securities whose Registrable Securities are not already the subject of a Shelf and shall include in such Follow-On Shelf all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 Business Days after sending the Follow-On Registration Notice. Notwithstanding the foregoing, the Company shall not be required to file a Follow-On Shelf (x) if the aggregate amount of Registrable Securities requested to be registered on such Follow-On Shelf by all Holders that have not yet been registered
represent less than 1% of the then issued and outstanding New Common Stock or (y) if the Company has filed a Follow-On Shelf in the prior 120 days. The Company shall use its commercially reasonable efforts to cause such Follow-On Shelf to be declared effective as promptly as practicable and in any event within 60 days of filing such Follow-On Shelf. Any Registrable Securities requested to be registered pursuant
7
to this
Section 1(h)(i)
that have not been registered on a Shelf at the time the Follow-On Shelf is filed shall be registered pursuant to such Follow-On Shelf.
(ii)
If the Company is a Well-Known Seasoned Issuer, within 10 Business Days after a written request by one or more Holders of Registrable Securities to register for resale any additional Registrable Securities owned by such Holders, the Company shall make all necessary filings to include such Registrable Securities in the Automatic Shelf Registration Statement filed pursuant to
Section 1(i)
.
(iii)
If a Form S-3 Shelf or Automatic Shelf Registration Statement is effective, within 10 Business Days after written request therefor by a Holder of Registrable Securities, the Company shall file a Prospectus supplement or current report on Form 8-K to add such Holder as a selling stockholder in such Form S-3 Shelf or Automatic Shelf Registration Statement to the extent permitted under the rules and regulations promulgated by the Commission.
(k)
Other Registration Rights
. The Company shall not grant to any Person the right (other than as expressly contemplated by the Plan or as set forth herein and except with respect to registrations on Form S-8 and with respect to registrations on Form S-4 (or any successor forms thereto)), to request the Company to register any securities of the Company, except such rights as are: (i) not more favorable than or inconsistent with the rights granted to the Holders and (ii) that do not adversely affect the rights or priorities of the Holders of Registrable Securities set forth herein.
Section 2.
Holdback Agreements
.
(a)
Holders of Registrable Securities
. In connection with any Underwritten Shelf Takedown or other underwritten public offering of equity securities by the Company (a “
Company Underwritten Offering
”), if requested by the managing underwriter for such offering, each Holder who Beneficially Owns 5% or more of the outstanding shares of New Common Stock and any other Holder participating in such offering agrees to enter into a lock-up agreement containing customary restrictions on transfers of equity securities of the Company (except with respect to such securities as are proposed to be offered pursuant to the Underwritten Shelf Takedown or underwritten public equity offering) or any securities convertible into or exchangeable or exercisable for such securities (including, for the avoidance of doubt, the Warrants), without prior written consent from the Company, during the seven day period prior to and the 90 day period beginning on the date of pricing of such Underwritten Shelf Takedown (subject to extension in connection with any earnings release or other release of material information pursuant to FINRA Rule 2711(f) to the extent applicable) (the “
Lock-Up Period
”);
provided
, that the Holders shall not be subject to the provisions hereof unless the Company’s directors, officers, Holders who Beneficially Own 5% or more of the outstanding shares of New Common Stock and any other Holders participating in such offering shall have signed lock-up agreements containing substantially similar terms with the managing underwriter and if any such Person shall be subject to a shorter lock-up period, receives more advantageous terms relating to the Lock-Up Period or receives a waiver of its lock-up period from the Company or an underwriter, then the Lock-Up Period shall be such shorter period, on such more advantageous
8
terms and shall receive the benefit of such waiver;
provided
,
further
, that nothing herein will prevent (i)(a) any Holder that is a partnership, limited liability company or corporation from making a distribution of Registrable Securities to the partners, members or stockholders thereof, (b) the transfer by a Holder that is an investment advisor managing a separately managed account to the owner of the separately managed account, or (c) a transfer to an Affiliate that is otherwise in compliance with the applicable securities laws, so long as such distributees or transferees agree to be bound by the restrictions set forth in this
Section 2(a)
, (ii) the exercise, exchange or conversion of any security exercisable or exchangeable for, or convertible into, New Common Stock, provided the New Common Stock issued upon such exercise or conversion shall be subject to the restrictions set forth in this
Section 2(a)
, or (iii) any Holder from continuing market-making or other trading activities as a broker-dealer in the ordinary course of business;
provided
,
further
, that there shall be a period of at least 30 days between the end of any Lock-Up Period and the pricing date of any subsequent Company Underwritten Offering. If requested by the managing underwriter, each Holder agrees to execute a lock-up agreement in favor of the Company’s underwriters to such effect and, in any event, that the Company’s underwriters in any relevant Underwritten Shelf Takedown shall be third party beneficiaries of this
Section 2(a)
. The provisions of this
Section 2(a)
will no longer apply to a Holder once such Holder ceases to hold Registrable Securities.
(b)
The Company
. In connection with any Underwritten Shelf Takedown, the Company shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities (except pursuant to registrations on Form S-8 or Form S-4 under the Securities Act or any similar or successor form providing for the registration of securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans), during the seven day period prior to and the 90 day period beginning on the date of pricing of such Underwritten Shelf Takedown (subject to extension in connection with any earnings release or other release of material information pursuant to FINRA Rule 2711(f) to the extent applicable).
Section 3.
Company Undertakings.
Whenever Registrable Securities are registered pursuant to this Agreement, the Company shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities as soon as reasonably practicable in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a)
before filing a Registration Statement or Prospectus, any amendments or supplements thereto or any Issuer Free Writing Prospectus, at the Company’s expense, furnish to Counsel to the Holders copies of all such documents, other than documents that are incorporated by reference, proposed to be filed and such other documents reasonably requested by the Holders and provide a reasonable opportunity for review and comment on such documents by Counsel to the Holders;
(b)
notify each Holder of Registrable Securities of the effectiveness of each Registration Statement and prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as
9
may be necessary to keep such Registration Statement effective until the date on which all Registrable Securities have been sold pursuant to the Registration Statement or have otherwise ceased to be Registrable Securities (provided that if no Holder (taken together with its Affiliates) Beneficially Owns more than 10% of the then outstanding New Common Stock, the Company shall only be obligated to maintain the effectiveness of each such Registration Statement until the five-year anniversary of the effective date of the Shelf), and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;
(c)
refrain from naming any Holder as an underwriter in a registration statement, without first obtaining such Holder’s written consent;
(d)
furnish to each seller of Registrable Securities, and the managing underwriters (if any), without charge, such number of copies of the applicable Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus, final Prospectus, and any other Prospectus (including any Prospectus filed under Rule 424, Rule 430A or Rule 430B promulgated under the Securities Act and any Issuer Free Writing Prospectus)), all exhibits and other documents filed therewith and such other documents as such seller or such managing underwriters (if any) may reasonably request including in order to facilitate the disposition of the Registrable Securities owned by such seller, and upon request, a copy of any and all transmittal letters or other correspondence to or received from, the Commission or any other governmental authority relating to such offer;
(e)
(i) register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests, (ii) keep such registration or qualification in effect for so long as the applicable Registration Statement remains in effect, and (iii) use its commercially reasonable efforts to do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (
provided
that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction);
(f)
notify each seller of such Registrable Securities, Counsel to the Holders and the managing underwriters (if any) (i) at any time when a Prospectus relating to the applicable Registration Statement is required to be delivered under the Securities Act, (A) promptly upon discovery that, or upon the happening of any event as a result of which, such Registration Statement, or the Prospectus or Free Writing Prospectus relating to such Registration Statement, or any document incorporated or deemed to be incorporated therein by reference contains an untrue statement of a material fact or omits any fact necessary to make the statements in the Registration Statement or the Prospectus or Free Writing Prospectus relating thereto not misleading or otherwise requires the making of any changes in such Registration Statement, Prospectus, Free Writing Prospectus or document, and, at the request of any such seller and subject to
Section 1(e)(ii)
hereof, the Company shall promptly prepare a supplement or
10
amendment to such Prospectus or Free Writing Prospectus, furnish a reasonable number of copies of such supplement or amendment to each seller of such Registrable Securities, Counsel to the Holders and the managing underwriters (if any) and file such supplement or amendment with the Commission so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus or Free Writing Prospectus as so amended or supplemented shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading, (B) promptly if the Company becomes aware of any request by the Commission or any Federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or Free Writing Prospectus covering Registrable Securities or for additional information relating thereto, (C) promptly if the Company becomes aware of the issuance or threatened issuance by the Commission of any stop order suspending or threatening to suspend the effectiveness of a Registration Statement covering the Registrable Securities (and use its commercially reasonable efforts to obtain the lifting of any such stop order as soon as reasonably practicable) or (D) promptly upon the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Security for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (ii) when each such Registration Statement or any amendment thereto has been filed with the Commission and when each Registration Statement or the related Prospectus or Free Writing Prospectus or any Prospectus supplement or any post-effective amendment thereto has become effective;
(g)
use its commercially reasonable efforts to cause all such Registrable Securities (i) if the New Common Stock is then listed on a securities exchange, to continue to be so listed, (ii) if the New Common Stock is not then listed on a securities exchange, to, as promptly as practicable (subject to the limitations set forth in the Plan) be listed on the NYSE or NASDAQ (or any other national securities exchange), and (iii) to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of the Registrable Securities;
(h)
provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities no later than the effective date of the applicable Registration Statement;
(i)
enter into and perform under such customary agreements (including underwriting agreements in customary form, including customary representations and warranties and provisions with respect to indemnification and contribution) and take such other actions as may be reasonably requested by the selling Holders or the managing underwriter, if any, to complete the offer for sale or disposition of the Registrable Securities;
(j)
(A) subject to each selling Holder to whom a “comfort” letter is addressed providing a customary representation letter to the independent registered public accounting firm of the Company in form and substance reasonably satisfactory to such accountants, use its commercially reasonable efforts to obtain customary “comfort” letters from such accountants (to the extent deliverable in accordance with their professional standards) addressed to such selling Holder (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accountants) and the managing underwriter, if any, in customary form and covering matters of the type customarily covered in “comfort” letters in connection
11
with underwritten offerings; (B) use its commercially reasonable efforts to obtain opinions of counsel to the Company (such counsel being reasonably satisfactory to the managing underwriter, if any) and updates thereof covering matters customarily covered in opinions of counsel in connection with underwritten offerings, addressed to each selling Holder and the managing underwriter, if any,
provided
, that the delivery of any “10b-5 statement” may be conditioned on the prior or concurrent delivery of a “comfort” letter pursuant to subsection (A) above; and (C) provide officers’ certificates and other customary closing documents customarily delivered in connection with underwritten offerings and reasonably requested by the managing underwriter, if any;
provided
, that the Company shall only be required to comply with this
clause (j)
in connection with, (x) the initial effective date of the first Shelf filed pursuant to
Section 1(a)
and (y) an Underwritten Shelf Takedown;
(k)
provide reasonable cooperation, including causing appropriate officers to attend and participate in “road shows” and other informational meetings organized by the underwriters, if any, with all out-of-pocket costs and expenses incurred by the Company or such officers in connection with such attendance to be paid by the Company;
(l)
upon reasonable notice and during normal business hours, make available for inspection and copying by any Holder of Registrable Securities, Counsel to the Holders, any underwriter participating in any disposition pursuant to a Registration Statement or Underwritten Shelf Takedown, and any underwriter’s counsel, as applicable, all financial and other records and pertinent corporate documents of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information and participate in any due diligence sessions reasonably requested by any such Holder, Counsel to the Holders, underwriter or underwriter’s counsel in connection with such Registration Statement or Underwritten Shelf Takedown, as applicable;
(m)
permit any Holder of Registrable Securities, Counsel to the Holders, any underwriter participating in any disposition pursuant to a Registration Statement, and any other attorney, accountant or other agent retained by such Holder of Registrable Securities or underwriter, to participate (including, but not limited to, reviewing, commenting on and attending all meetings) in the preparation of such Registration Statement and any Prospectus supplements relating to a Underwritten Shelf Takedown, if applicable;
(n)
in the event of the issuance or threatened issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any New Common Stock included in such Registration Statement for sale in any jurisdiction, the Company shall use its commercially reasonable efforts promptly to (i) prevent the issuance of any such stop order, and in the event of such issuance, to obtain the withdrawal of such order and (ii) obtain the withdrawal of any order suspending or preventing the use of any related Prospectus or Free Writing Prospectus or suspending qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction at the earliest practicable date;
(o)
with respect to each Free Writing Prospectus or other materials to be included in the Disclosure Package, ensure that no Registrable Securities be sold “by means of”
12
(as defined in Rule 159A(b) promulgated under the Securities Act) such Free Writing Prospectus or other materials without the prior written consent of the Holders of a majority of the Registrable Securities that are being sold pursuant to such Free Writing Prospectus, which Free Writing Prospectuses or other materials shall be subject to the review of Counsel to the Holders;
provided
,
however
, the Company shall not be responsible or liable for any breach by a Holder that has not obtained the prior written consent of the Company pursuant to
Section 12(o)
;
(p)
provide a CUSIP number for the Registrable Securities prior to the effective date of the first Registration Statement including Registrable Securities;
(q)
promptly notify in writing the Holders, the sales or placement agent, if any, therefor and the managing underwriters (if any) of the securities being sold, (i) when such Registration Statement or related Prospectus or Free Writing Prospectus or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to any such Registration Statement or any post-effective amendment, when the same has become effective and (ii) of any written comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto;
(r)
(i) prepare and file with the Commission such amendments and supplements to each Registration Statement as may be necessary to comply with the provisions of the Securities Act, including post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable time period required hereunder and if applicable, file any Registration Statements pursuant to Rule 462(b) promulgated under the Securities Act; (ii) cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) comply with the provisions of the Securities Act and the Exchange Act and any applicable securities exchange or other recognized trading market with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; and (iv) provide additional information related to each Registration Statement as requested by, and obtain any required approval necessary from, the Commission or any Federal or state governmental authority;
(s)
provide officers’ certificates and other customary closing documents;
(t)
cooperate with each Holder of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and underwriters’ counsel in connection with any filings required to be made with FINRA;
(u)
within the deadlines specified by the Securities Act, make all required filing fee payments in respect of any Registration Statement or Prospectus used under this Agreement (and any offering covered thereby);
(v)
if requested by any participating Holder of Registrable Securities or the managing underwriters (if any), promptly include in a Prospectus supplement or amendment such information as the Holder or managing underwriters (if any) may reasonably request
13
relating to the intended method of distribution of such securities, and make all required filings of such Prospectus supplement or such amendment as soon as reasonably practicable after the Company has received such request;
(w)
in the case of certificated Registrable Securities, if any, cooperate with the participating Holders of Registrable Securities and the managing underwriters (if any) to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations satisfactory to the Company from each participating Holder that the Registrable Securities represented by the certificates so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the Holders or managing underwriters (if any) may reasonably request at least two Business Days prior to any sale of Registrable Securities; and use its commercially reasonable efforts to take all other actions necessary to effect the registration and sale of the Registrable Securities contemplated hereby; and
(x)
use its commercially reasonable efforts to take all other actions necessary or customarily taken by issuers to effect the registration of and its commercially reasonable efforts to take all other actions necessary to effect the sale of, the Registrable Securities contemplated hereby.
Section 4.
Registration Expenses.
All Registration Expenses shall be borne by the Company. All Selling Expenses relating to Registrable Securities registered shall be borne by the Holders of such Registrable Securities
pro rata
on the basis of the number of Registrable Securities sold.
Section 5.
Indemnification; Contribution
.
The Company agrees to indemnify and hold harmless each Holder of Registrable Securities, the Affiliates, directors, officers, employees, members, managers and agents of each such Holder and each Person who controls any such Holder within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, expenses and actions to which they or any of them may become subject insofar as such losses, claims, damages, liabilities and expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement as originally filed or in any amendment thereof, or the Disclosure Package, or any preliminary, final or summary Prospectus or Free Writing Prospectus included in any such Registration Statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Disclosure Package, or any preliminary, final or summary Prospectus or Free Writing Prospectus included in any such Registration Statement (in light of the circumstances under which they were made) not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, expense or action (whether or not the indemnified party is a party to any proceeding);
provided
,
however
, that the Company will not be liable in any case to the extent that any such loss, claim, damage, liability or expense arises (i) out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made
14
therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any such Holder specifically for inclusion therein including, without limitation, any notice and questionnaire, or (ii) out of sales of Registrable Securities made during a Suspension Period after notice is given pursuant to
Section 1(f)(ii)
hereof. This indemnity clause will be in addition to any liability which the Company may otherwise have.
(b)
Each Holder severally (and not jointly) agrees to indemnify and hold harmless the Company and each of its Affiliates, directors, employees, members, managers and agents and each Person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages or liabilities to which they or any of them may become subject insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement as originally filed or in any amendment thereof, or in the Disclosure Package or any Holder Free Writing Prospectus, preliminary, final or summary Prospectus included in any such Registration Statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Disclosure Package, or any preliminary, final or summary Prospectus or Free Writing Prospectus included in any such Registration Statement, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission is contained in any written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion therein;
provided
,
however
, that the total amount to be indemnified by such Holder pursuant to this
Section 5(b)
shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Holder in the offering to which such Registration Statement, Disclosure Package, Prospectus or Holder Free Writing Prospectus relates. This indemnity clause will be in addition to any liability which any such Holder may otherwise have.
(c)
Promptly after receipt by an indemnified party under this
Section 5
of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this
Section 5
, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent such action and such failure results in material prejudice to the indemnifying party and forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and, except as provided in the next sentence, after notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof. Notwithstanding the indemnifying party’s rights in the prior sentence, the indemnified party shall have the right to employ its own counsel (and one
15
local counsel), but the indemnified party shall bear the reasonable fees, costs and expenses of such separate counsel unless (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would be inappropriate due to a conflict of interest in the reasonable judgment of the indemnified party; (ii) the indemnifying party shall authorize the indemnified party in writing to employ separate counsel at the expense of the indemnifying party;
provided
,
however
, in the event that there are multiple indemnified parties, such indemnified parties shall in no case be entitled to more than two counsels; or (iii) the indemnifying party has failed to assume defense of such action within a reasonable time following notice from the indemnified party. No indemnifying party shall, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general circumstances or allegations, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties unless the use of only one firm of attorneys would be inappropriate due to a conflict of interest in the reasonable judgment of the indemnified party. An indemnifying party shall not be liable under this
Section 5
to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to in writing by such indemnifying party. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement or compromise if any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement or compromise includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d)
In the event that the indemnity provided in
Section 5(a)
or
Section 5(b)
above is held by a court of competent jurisdiction to be unavailable to or insufficient to hold harmless an indemnified party with respect to any loss, claim, damage, liability, expense or action referred to herein, then each applicable indemnifying party agrees to contribute to the aggregate losses, claims, damages and liabilities (including, without limitation, legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively, “
Losses
”) to which such indemnifying party may be subject in such proportion as is appropriate to reflect the relative benefits received from the offering of the New Common Stock, as applicable, and relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefit received by the Company shall be deemed to be equal to the total value received or proposed to be received (after deducting expenses) by the Company pursuant to the sale of New Common Stock in an offering, if any. The relative benefit received by the Holders shall be deemed to be equal to the value of having the Registrable Securities registered under the Securities Act. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party on the one hand or the indemnified party on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
16
omission. The parties agree that it would not be just and equitable if contribution pursuant to this
Section 5(d)
were determined by
pro rata
allocation (even if the Holders of Registrable Securities or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this
Section 5(d)
. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this
Section 5(d)
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 5(d)
, no Person guilty of fraud or fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraud or fraudulent misrepresentation. For purposes of this
Section 5
, each Person who controls any Holder of Registrable Securities, agent or underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of any such Holder, agent or underwriter shall have the same rights to contribution as such Holder, agent or underwriter, and each Person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this
Section 5(d)
.
(e)
The provisions of this
Section 5
will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder of Registrable Securities or the Company or any of the officers, directors or controlling Persons referred to in this
Section 5
, and will survive the transfer of Registrable Securities.
Section 6.
Participation in Underwritten Offering/Sale of Registrable Securities.
(a)
It shall be a condition precedent to the obligations of the Company to include Registrable Securities of any Holder in any Registration Statement or Prospectus, as the case may be, that such Holder shall timely furnish to the Company (as a condition precedent to such Holder’s participation in such registration) its Selling Holder Information in accordance with the terms hereof. Each selling Holder shall timely provide the Company with such information as may be reasonably requested to enable the Company to prepare a supplement or post-effective amendment to any Shelf Registration or a supplement to any Prospectus relating to such Shelf Registration.
(b)
No Person may participate in any underwritten offering hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements in customary form entered into pursuant to this Agreement and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.
(c)
Each Person that has securities registered on a Registration Statement filed hereunder agrees that, upon receipt of any notice contemplated in
Section 1(f)(ii)
, such Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the applicable Registration Statement.
17
Section 7.
Private Sale and Legends
. (a) Except as provided in
Section 2
, the Company agrees that nothing in this Agreement shall prohibit the Holders, at any time and from time to time, from selling or otherwise transferring Registrable Securities pursuant to a private sale or other transaction which is not registered pursuant to the Securities Act.
(b)
At the request of a Holder and to the extent the Registrable Securities are certificated, the Company shall remove from each certificate evidencing Registrable Securities, any legend if the Company is reasonably satisfied (based upon an opinion of counsel or, in the case of a Holder that is not an Affiliate of the Company proposing to transfer such securities pursuant to Rule 144(b)(1) of the Securities Act, other evidence) that the securities evidenced thereby may be publicly sold without registration under the Securities Act.
Section 8.
Rule 144 and Rule 144A; Other Exemptions.
With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 and Rule 144A promulgated under the Securities Act and other rules and regulations of the Commission that may at any time permit a Holder of Registrable Securities to sell securities of the Company to the public without registration, the Company covenants that it will (i) use its commercially reasonable efforts to file in a timely manner all reports and other documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder and (ii) make available information necessary to comply with Rule 144 and Rule 144A, if available with respect to resales of the Registrable Securities under the Securities Act, at all times, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (x) Rule 144 and Rule 144A promulgated under the Securities Act (if available with respect to resales of the Registrable Securities), as such rules may be amended from time to time or (y) any other rules or regulations now existing or hereafter adopted by the Commission. Notwithstanding the foregoing, the parties to this Agreement hereby acknowledge and agree that failure by the Company to timely file: (i) its quarterly report on Form 10-Q of for the third quarter of 2012, (ii) its annual report on Form 10-K for the fiscal year ended December 31, 2012 and (iii) the amendment, if any, to include financial information pursuant to Rule 3-05 of Regulation S-K with respect to the periodic report on Form 8-K of the Company and Dynegy Holdings, LLC, filed on June 11, 2012, in each case, shall not be and shall not be deemed to be, a violation of the provisions of this Section 8.
Section 9.
Transfer of Registration Rights.
The rights of a Holder hereunder may be transferred, assigned, or otherwise conveyed on a
pro rata
basis in connection with any transfer, assignment, or other conveyance of Registrable Securities to any transferee or assignee;
provided
that all of the following additional conditions are satisfied: (a) such transfer or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement by delivering to the Company a duly executed joinder agreement in the form attached hereto as
Exhibit A
; and (c) the Company is given written notice by such Holder of such transfer or assignment, stating the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned.
Section 10.
Joinder
.
Any Person may acquire the rights and obligations of a Holder hereunder if it (taken together with its Affiliates) demonstrates that it Beneficially Owns
18
10% of the Registrable Securities and agrees in writing to become subject to the terms of this Agreement as a Holder by delivering to the Company a duly executed joinder agreement in the form attached hereto as
Exhibit A
.
Section 11.
Amendment, Modification and Waivers; Further Assurances
.
(a)
Amendment
. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company and the other parties to this Agreement.
(b)
Effect of Waiver
. No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or any other term or condition, nor shall any failure of any party to enforce any provision hereof operate or be construed as a waiver of such provision or of any other provision hereof and shall not affect the right of such party thereafter to enforce each provision of this Agreement in accordance with its terms. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision.
(c)
Further Assurances
. Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement.
Section 12.
Miscellaneous; Remedies; Specific Performance
.
(a)
Specific Performance
. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically, to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for, and obtain from any such court, specific performance and/or injunctive relief (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement and shall not be required to prove irreparable injury to such party or that such party does not have an adequate remedy at law with respect to any breach of this Agreement (each of which elements the parties admit). The parties hereto further agree and acknowledge that each and every obligation applicable to it contained in this Agreement shall be specifically enforceable against it and hereby waives and agrees not to assert any defenses against an action for specific performance of their respective obligations hereunder. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies available under this Agreement or otherwise.
(b)
Successors and Assigns
. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective
19
successors and assigns of the parties hereto (including any trustee in bankruptcy) whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of purchasers or Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent Holder of Registrable Securities. No assignment or delegation of this Agreement by the Company, or any of the Company’s rights, interests or obligations hereunder, shall be effective against any Holder without the prior written consent of such Holder.
(c)
Severability
. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without prohibiting or invalidating the remainder of this Agreement.
(d)
Counterparts
. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.
(e)
Descriptive Headings; Interpretation; No Strict Construction
. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and, if applicable, hereof. The words “include,” “includes” or “including” in this Agreement shall be deemed to be followed by “without limitation.” The use of the words “or,” “either” or “any” shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor thereto in effect at the time. All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be references to the comparable successors thereto from time to time.
(f)
Governing Law
. This Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of New York.
(g)
Notices
. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when (a) delivered personally to the recipient, (b) telecopied or sent
20
by facsimile to the recipient, or (c) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to the Company at the address set forth below and to any Holder of Registrable Securities at the address set forth on the signature page hereto, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. The Company’s address is:
Dynegy Inc.
601 Travis — 14
th
Floor
Houston, Texas 77002
Facsimile:
(713) 767-5181
Attention:
Chief Financial Officer
with copies (which shall not constitute notice) to:
White & Case LLP
Southeast Financial Center
200 South Biscayne Boulevard
Suite 4900
Miami, Florida 33131
Facsimile: (305) 358-5744
Attention: Thomas E. Lauria
and
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: David Johansen
Gregory Pryor
If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period shall automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.
(h)
Delivery by Facsimile
. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic means, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or, thereto shall reexecute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or other electronic
21
means to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or other electronic means as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
(i)
Waiver of Jury Trial
. Each of the parties to this Agreement hereby agrees to waive its respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 12(i)
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
(j)
Arm’s Length Agreement
. Each of the parties to this Agreement agrees and acknowledges that this Agreement has been negotiated in good faith, at arm’s length, and not by any means prohibited by law.
(k)
Sophisticated Parties; Advice of Counsel
. Each of the parties to this Agreement specifically acknowledges that (i) it is a knowledgeable, informed, sophisticated Person capable of understanding and evaluating the provisions set forth in this Agreement and (ii) it has been fully advised and represented by legal counsel of its own independent selection and has relied wholly upon its independent judgment and the advice of such counsel in negotiating and entering into this Agreement.
(l)
Entire Agreement
. This Agreement, together with the schedules and exhibits attached hereto, and any certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement and understanding of the parties in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the parties, written or oral, to the extent they relate in any way to the subject matter hereof.
(m)
Attorneys’ Fees
. In the event of litigation or other proceedings in connection with or related to this Agreement, the prevailing party in such litigation or proceeding shall be entitled to reimbursement from the opposing party of all reasonable expenses, including, without limitation, reasonable attorneys’ fees and expenses of investigation in connection with such litigation or proceeding.
(n)
Certification
. Within 10 Business Days following receipt of a written request from the Company by any Holder (which request shall not be made more than twice in any calendar year), such Holder shall certify to the Company that such Holder continues to hold
22
Registrable Securities (the “
Certification
”). If a Holder fails to provide the Certification within the 10 Business Day period referred to in the immediately preceding sentence, the Company reserves the right, in its sole discretion, to remove such Holder’s Registrable Securities from a Registration Statement.
(o)
Free Writing Prospectus Consent
. No Holder shall use a Holder Free Writing Prospectus without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.
(p)
No Required Sale
. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement.
(q)
Termination
. The obligations of the Company and of any Holder, other than those obligations contained in
Section 5
, shall terminate with respect to the Company and such Holder as soon as such Holder no longer holds any Registrable Securities.
(r)
No Third-Party Beneficiaries or Other Right
. Nothing herein shall grant to or create in any person not a party hereto, or any such person’s dependents or heirs, any right to any benefits hereunder or any remedies hereunder, and no such party shall be entitled to sue any party to this Agreement with respect thereto;
provided
,
however
, that the Affiliates, directors, officers, employees, members, managers and agents of each indemnified party and each Person who controls any such indemnified party within the meaning of either the Securities Act or the Exchange Act are intended third-party beneficiaries of
Section 5
and shall have the right, power, and authority to enforce the provisions thereof as though they were a party hereto.
Section 13.
Definitions
.
”
Affiliate
” of any particular Person means any other Person directly or indirectly controlling, controlled by or under common control with such particular Person.
“
Agreement
” has the meaning specified in the first paragraph hereof.
“
Automatic Shelf Registration Statement
” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.
“
Beneficial Ownership
” and terms of similar import shall be as defined under and determined pursuant to Rule 13d-3 promulgated under the Exchange Act.
“
Business Day
” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.
“
Certification
” has the meaning specified in
Section 12(n)
.
“
Commission
” means the United States Securities and Exchange Commission or any successor governmental agency.
“
Company
” has the meaning specified in the first paragraph hereof.
23
“
Company Held Securities
” means Other Securities sought to be included in a registration for the Company’s account.
“
Company Notice
” has the meaning specified in
Section 1(d)
.
“
Company Underwritten Offering
” has the meaning specified in
Section 2(a)
.
“
control
” (including the terms “controlling,” “controlled by” and “under common control with”) means, unless otherwise noted, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting shares, by contract, or otherwise.
“
Counsel to the Holders
” means, one counsel (and one local counsel) selected from time to time by the Holders of a majority of the Registrable Securities.
“
Demand
” has the meaning specified in
Section 1(d)
.
“
Demand Holder
” has the meaning specified in
Section 1(d)
.
“
Demand Notice
” has the meaning specified in
Section 1(d)
.
“
Determination Date
” has the meaning specified in
Section 1(i)
.
“
DH
” has the meaning specified in the Recitals.
“
Disclosure Package
” means, with respect to any offering of securities, (i) the preliminary prospectus, (ii) each Free Writing Prospectus and (iii) all other information, in each case, that is deemed, under Rule 159 promulgated under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including a contract of sale).
“
Effective Date
” has the meaning specified in the Recitals.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended from time to time.
“
FINRA
” means the Financial Industry Regulatory Authority.
“
Follow-On Registration Notice
” has the meaning specified in
Section 1(j)(i)
.
“
Follow-On Shelf
” has the meaning specified in
Section 1(j)(i)
.
“
Form S-1
” means such form under the Securities Act, as amended from time to time by the Commission.
“
Form S-3
” means such form under the Securities Act, as amended from time to time by the Commission.
24
“
Form S-3 Shelf
” has the meaning specified in
Section 1(a)
.
“
Free Writing Prospectus
” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act.
“
Holder
” and “
Holders
” have the meanings specified in the first paragraph hereof.
“
Holder Free Writing Prospectus
” means each Free Writing Prospectus prepared by or on behalf of the relevant Holder or used or referred to by such Holder in connection with the offering of Registrable Securities.
“
Initial Shelf Effective Date
” has the meaning specified in
Section 1(a)
.
“
Investors
” has the meaning specified in the first paragraph hereof.
“
Issuer Free Writing Prospectus
” means an “issuer free writing prospectus” under Rule 433 promulgated under the Securities Act.
“
Lock-Up Period
” has the meaning specified in
Section 2(a)
.
“
Losses
” has the meaning specified in
Section 5(d)
.
“
Merger
” has the meaning specified in the Recitals.
“
NASDAQ
” means The NASDAQ Stock Market.
“
New Common Stock
” means the shares of common stock, par value $0.01 per share, of the Company issued on and after the Effective Date and any additional shares of such common stock paid, issued or distributed in respect of any such shares by way of a stock dividend, stock split or distribution, or in connection with a combination of shares, and any such security into which such New Common Stock shall have been converted or exchanged in connection with a recapitalization, reorganization, reclassification, merger, consolidation, exchange, distribution or otherwise.
“
Non-Underwritten Shelf Takedown
” has the meaning specified in
Section 1(c)
.
“
NYSE
” means the New York Stock Exchange.
“
Other Securities
” means securities of the Company sought to be included in a registration other than Registrable Securities.
“
Person
” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.
“
Piggyback Notice
” has the meaning specified in
Section 1(g)(i)
.
25
“
Piggyback Takedown
” has the meaning specified in
Section 1(g)(i)
.
“
Plan
” has the meaning specified in the Recitals.
“
Prospectus
” means the prospectus used in connection with a Registration Statement and any amendments or supplements thereto.
“
Registrable Securities
” means, at any time, any shares of New Common Stock issued or issuable on or after the Effective Date to any Holder, including, without limitation, any New Common Stock issued pursuant to the Plan or upon the conversion, exercise or exchange, as applicable, of any other securities and/or interests, including for avoidance of doubt, any New Common Stock issued pursuant to the exercise of the Warrants and any securities paid, issued or distributed in respect of any such New Common Stock by way of stock dividend, stock split or distribution, or in connection with a combination of shares, recapitalization, reorganization, merger or consolidation, or otherwise, but excluding shares of New Common Stock acquired in the open market after the Effective Date;
provided
,
however
, that, as to any Registrable Securities, such securities shall cease to constitute Registrable Securities upon the earliest to occur of: (w) the date on which such securities are disposed of pursuant to an effective registration statement under the Securities Act; (x) the date on which such securities are disposed of pursuant to Rule 144 (or any successor provision) promulgated under the Securities Act; (y) with respect to the Registrable Securities held by any Holder, any time that such Holder Beneficially Owns Registrable Securities representing less than 1% of the then outstanding New Common Stock and is permitted sell such Registrable Securities under Rule 144(b)(1); and (z) the date on which such securities cease to be outstanding. For the purposes of this Agreement, a Person shall be deemed to be a holder of Registrable Securities whenever such Person has the right to acquire such Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitation upon the exercise of such right), whether or not such acquisition has been effected.
“
Registration Expenses
” means all expenses (other than underwriting discounts and commissions) arising from or incident to the registration of Registrable Securities in compliance with this Agreement, including, without limitation, (i) Commission, stock exchange, FINRA and other registration and filing fees, (ii) all fees and expenses incurred in connection with complying with any securities or blue sky laws (including, without limitation, fees, charges and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, messenger and delivery expenses, (iv) the fees, charges and disbursements of counsel to the Company and of its independent public accountants and any other accounting and legal fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any special audits or “comfort” letters required in connection with or incident to any registration), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities on the NYSE or NASDAQ (or any other national securities exchange) or the quotation of Registrable Securities on any inter-dealer quotation system, (vi) the fees and expenses incurred in connection with any road show for underwritten offerings and (vii) reasonable fees, charges and disbursements of Counsel to the Holders, including, for the avoidance of doubt, any expenses of Counsel to the Holders in connection with the filing or amendment of any Registration Statement, Prospectus or Free Writing Prospectus hereunder.
26
“
Registration Notice
” has the meaning specified in
Section 1(a)
.
“
Registration Statement
” means any registration statement filed hereunder.
“
Securities Act
” means the Securities Act of 1933, as amended from time to time.
“
Selling Expenses
” means the underwriting fees, discounts, selling commissions and stock transfer taxes applicable to all Registrable Securities registered by the Holders and legal expenses not included within the definition of Registration Expenses.
“
Selling Holder Information
” has the meaning specified in
Section 1(a)
.
“
Shelf
” has the meaning specified in
Section 1(a)
.
“
Shelf Registration
” means a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“
Shelf Registration Statement
” has the meaning specified in
Section 1(g)(i)
.
“
Suspension Period
” has the meaning specified in
Section 1(e)(ii)
.
“
Underwritten Shelf Takedown
” has the meaning specified in
Section 1(b)
.
“
Warrants
” has the meaning assigned to such term in the Plan.
“
Well-Known Seasoned Issuer
” means a “well-known seasoned issuer” under Rule 405 promulgated under the Securities Act.
“
WKSI
” has the meaning specified in
Section 1(g)(i)
.
* * *
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
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DYNEGY INC.
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By:
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/s/ Catherine B. Callaway
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Name: Catherine B. Callaway
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Title: EVP, General Counsel & Chief Compliance Officer
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Signature Page — Registration Rights Agreement
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FRANKLIN ADVISORS, INC.
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By:
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/s/ Alex W. Peters
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Name: Alex W. Peters
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Title: Portfolio Manager
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Address for Notices:
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Facsimile:
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Attention:
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Signature Page — Registration Rights Agreement
EXHIBIT A
FORM OF JOINDER AGREEMENT
Ladies and Gentlemen:
Reference is made to the Registration Rights Agreement, dated as of [ ], 2012 (as such agreement may have been or may be amended from time to time) (the “
Registration Rights Agreement
”), by and among Dynegy Inc., a Delaware corporation (the “
Company
”), each of the other parties signatory thereto and any other parties identified on the signature pages of any joinder agreements substantially similar to this joinder agreement executed and delivered pursuant to
Section 10
of the Registration Rights Agreement. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Registration Rights Agreement.
In consideration of the transfer to the undersigned of Registrable Securities of the Company, the undersigned represents that it is a transferee of [insert name of transferor] and agrees that, as of the date written below, the undersigned shall become a party to the Registration Rights Agreement, and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Registration Rights Agreement as though an original party thereto.
[SIGNATURE PAGE FOLLOWS]
Executed as of the day of , .
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TRANSFEREE: [insert name of transferee]
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By:
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Name:
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Title:
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Address:
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Acknowledged and agreed by:
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DYNEGY INC.
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By:
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Name:
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Title:
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Signature Page — Registration Rights Agreement
Exhibit 10.2
EXECUTION COPY
WARRANT AGREEMENT
BETWEEN
DYNEGY INC.
AND
COMPUTERSHARE INC. AND
COMPUTERSHARE TRUST COMPANY, N.A.,
AS WARRANT AGENT
OCTOBER 1, 2012
TABLE OF CONTENTS
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SECTION 1. Appointment of Warrant Agent
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2
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SECTION 2. Issuances
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2
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SECTION 3. Form of Warrants
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2
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SECTION 4. Execution of Global Warrant Certificates
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3
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SECTION 5. Registration and Countersignature
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3
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SECTION 6. Registration of Transfers and Exchanges
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4
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SECTION 7. Duration and Exercise of Warrants
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8
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SECTION 8. Cancellation of Warrants
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SECTION 9. Mutilated or Missing Global Warrant Certificates
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12
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SECTION 10. Reservation of Warrant Shares
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12
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SECTION 11. Stock Exchange Listings
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SECTION 12. Adjustment of Exercise Price and Number of Warrant Shares Purchasable or Number of Warrants
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13
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SECTION 13. Fractional Warrant Shares
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SECTION 14. Redemption
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SECTION 15. Notices to Warrantholders
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21
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SECTION 16. Merger, Consolidation or Change of Name of Warrant Agent
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SECTION 17. Warrant Agent
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SECTION 18. Change of Warrant Agent
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SECTION 19. Holder Not Deemed a Stockholder
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SECTION 20. Notices to Company and Warrant Agent
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SECTION 21. Payment of Taxes and Charges
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SECTION 22. Exercise of Warrants and Beneficial Ownership Limitations
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SECTION 23. Supplements and Amendments
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28
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SECTION 24. Successors
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SECTION 25. Termination
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SECTION 26. Governing Law Venue and Jurisdiction; Trial By Jury
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29
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SECTION 27. Benefits of this Agreement
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SECTION 28. Counterparts
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30
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SECTION 29. Headings
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SECTION 30. Severability
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SECTION 31. Meaning of Terms Used in Agreement
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30
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EXHIBITS
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Exhibit A-1
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Form of Warrant Statement
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Exhibit A-2
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Form of Global Warrant Certificate
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Exhibit B-1
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Form of Election to Exercise For Warrant Holders Holding Warrants in Form of Book-Entry Warrants
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Exhibit B-2
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Form of Election to Exercise Warrant for Holders Holding Warrants through the Depository Trust Company
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Exhibit C
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Form of Assignment
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Exhibit D
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Fee Schedule
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WARRANT AGREEMENT
This WARRANT AGREEMENT (this “
Agreement
”), dated as of October 1, 2012 by and between DYNEGY INC., a Delaware corporation (the “
Company
”) and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered, limited purpose trust company (collectively, the “
Warrant Agent
” or individually, “Computershare” and the “Trust Company,” respectively).
Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Plan (as defined below).
PRELIMINARY STATEMENTS
WHEREAS, on November 7, 2011, Dynegy Holdings, LLC (“
DH
”), a wholly-owned subsidiary of the Company, and certain of DH’s subsidiaries, filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (the “
Bankruptcy Code
”) in the United States Bankruptcy Court for the for the Southern District of New York, Poughkeepsie Division (the “
Bankruptcy Court
”), which case is being jointly administered before the Bankruptcy Court under case number 11-38111 (the “
DH Chapter 11 Cases
”);
WHEREAS, on July 6, 2012, the Company filed a voluntary petition for reorganization under Chapter 11 of Title 11 of the Bankruptcy Code in the Bankruptcy Court, and became a debtor in the separately administered Chapter 11 Case No. 12-36728 (CGM);
WHEREAS, in connection with that certain Modified Third Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC proposed by DH and the Company [DH Case Docket No. 805] (the “
Plan
”), the Company and DH have consummated a merger, effective on October 1, 2012, with the Company having survived such merger, and the Company hereby issues Warrants (the “
Warrants
”) entitling the holders thereof to purchase initially an aggregate of up to 15,606,936 shares of common stock, par value $0.01 per share (the “
Common Stock
”) of the Company (following the merger), on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in exchange for the Company’s contribution of all of the membership interests of Dynegy Coal Holdco, LLC, a Delaware limited liability company and an indirect wholly-owned Subsidiary of the Company, to DH on June 5, 2012, the Company received from DH an allowed administrative claim pursuant to sections 503(b) and 507(a) of the Bankruptcy Code in an unliquidated amount against DH in the DH Chapter 11 Cases (the “
Dynegy Administrative Claim
”). Pursuant to the Plan, the Company assigned the Dynegy Administrative Claim to a trust established to hold and distribute the proceeds of the Dynegy Administrative Claim for the benefit of the holders of the Company’s common stock. The Warrants are hereby being issued to each such holder of Company’s common stock pursuant to the Plan, in an amount equal to each such holder’s pro-rata portion of the Dynegy Administrative Claim;
WHEREAS, the Warrants are being issued pursuant to, and on the terms and subject to the conditions set forth in, the Plan in an offering in reliance on the exemption afforded by section 1145 of the Bankruptcy Code from the registration requirements of the
Securities Act of 1933, as amended (the “
Securities Act
”), and of any applicable state securities or “blue sky” laws; and
WHEREAS, the Warrant Agent, at the request of the Company, has agreed to act as the agent of the Company in connection with the issuance, registration, transfer, exchange and exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, the parties hereto agree as follows:
SECTION 1.
Appointment of Warrant Agent
. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions hereinafter set forth in this Agreement (and no implied terms); and the Warrant Agent hereby accepts such appointment, on the terms and subject to the conditions hereinafter set forth.
SECTION 2.
Issuances
. On the terms and subject to the conditions of this Agreement, in accordance with the terms of the Plan, on the Effective Date or a date that is as soon as reasonably practicable after the Effective Date, the Warrants will be issued by the Company in the amounts and to the recipients specified in the Plan. On such date, the Company will deliver, or cause to be delivered, to the Depository (as defined below), one or more Global Warrant Certificates (as defined below) evidencing a portion of the Warrants. The remainder of the Warrants shall be issued by book-entry registration on the books of the Warrant Agent (“
Book-Entry Warrants
”) and shall be evidenced by statements issued by the Warrant Agent from time to time to the registered holder of book-entry Warrants reflecting such book-entry position (the “
Warrant Statement
”). Each Warrant evidenced thereby entitles the holder, upon proper exercise and payment of the applicable Exercise Price (as defined herein), to receive from the Company, as adjusted as provided herein, one fully paid and nonassessable share of Common Stock (the “
Warrant Number
”) at a price equal to $40.00 per share (as the same may be hereafter adjusted pursuant to Section 12, the “
Exercise Price
”). The shares of Common Stock or (as provided pursuant to
Section 12
hereof) securities, cash or other property deliverable upon proper exercise of the Warrants are referred to herein as the “
Warrant Shares
.” The maximum number of shares of Common Stock issuable pursuant to the Warrants shall be 15,606,936, as such amount is adjusted from time to time pursuant to this Agreement.
SECTION 3.
Form of Warrants
. Subject to
Section 6
of this Agreement, the Warrants shall be issued (1) via book-entry registration on the books and records of the Warrant Agent and evidenced by the Warrant Statements, in substantially the form set forth in
Exhibit A-1
, and/or (2) in the form of one or more global certificates (the “
Global Warrant Certificates
”), the forms of election to exercise and of assignment to be printed on the reverse thereof, in substantially the form set forth in
Exhibit A-2
attached hereto. The Warrant Statements and Global Warrant Certificates may bear such appropriate insertions, omissions, legends, substitutions and other variations as are required or permitted by this Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange or as may, consistently herewith, be determined by (i) in the case of Global Warrant Certificates, the Appropriate Officers (as defined herein) executing such Global Warrant Certificates, as evidenced by their execution of the Global Warrant
2
Certificates, or (ii) in the case of a Warrant Statement, any Appropriate Officer (as defined herein), and all of which shall be acceptable to the Warrant Agent.
The Global Warrant Certificates shall be deposited on or after the Effective Date or a date that is as soon as reasonably practicable after the Effective Date with, or with the Warrant Agent as custodian for, The Depository Trust Company (the “
Depository
”) and registered in the name of Cede & Co., as the Depository’s nominee. Each Global Warrant Certificate shall represent such number of the outstanding Warrants as specified therein, and each shall provide that it shall represent the aggregate amount of outstanding Warrants from time to time endorsed thereon and that the aggregate amount of outstanding Warrants represented thereby may from time to time be reduced or increased, as appropriate, in accordance with the terms of this Agreement.
SECTION 4.
Execution of Global Warrant Certificates
. Global Warrant Certificates shall be signed on behalf of the Company by its Chief Executive Officer, its President, a Vice President, its Secretary or an Assistant Secretary (each, an “
Appropriate Officer
”). Each such signature upon the Global Warrant Certificates may be in the form of a facsimile or electronic signature of any such Appropriate Officer and may be imprinted or otherwise reproduced on the Global Warrant Certificates and for that purpose the Company may adopt and use the facsimile or electronic signature of any Appropriate Officer.
If any Appropriate Officer who shall have signed any of the Global Warrant Certificates shall cease to be an Appropriate Officer before the Global Warrant Certificates so signed shall have been countersigned by the Warrant Agent or disposed of by the Company, such Global Warrant Certificates nevertheless may be countersigned and delivered or disposed of as though such Appropriate Officer had not ceased to be an Appropriate Officer of the Company, and any Global Warrant Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Global Warrant Certificate, shall be an Appropriate Officer, although at the date of the execution of this Agreement such Person was not an Appropriate Officer.
Global Warrant Certificates shall be dated the date of countersignature by the Warrant Agent and shall represent one or more whole Warrants.
SECTION 5.
Registration and Countersignature
. Upon written order of the Company, the Warrant Agent shall (i) register in the Warrant Register (as defined below) the Book-Entry Warrants as well as any Global Warrant Certificates and exchanges and transfers of outstanding Warrants in accordance with the procedures set forth in this Warrant Agreement and (ii) upon receipt of the Global Warrant Certificates duly executed on behalf of the Company, countersign one or more Global Warrant Certificates evidencing Warrants and shall deliver such Global Warrant Certificates to or upon the written order of the Company. Such written order of the Company shall specifically state the number of Warrants that are to be issued as Book-Entry Warrants and the number of Warrants that are to be issued as a Global Warrant Certificate. A Global Warrant Certificate shall be, and shall remain, subject to the provisions of this Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been canceled in accordance with the terms hereof. Each Person in whose name any Warrant is registered (the “
Holder
” of such Warrant) shall be bound by all of the terms and
3
provisions of this Warrant Agreement (a copy of which is available on request to the Secretary of the Company) as fully and effectively as if such Holder had signed the same.
No Global Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Global Warrant Certificate has been countersigned by the manual or facsimile signature of the Warrant Agent. Such signature by the Warrant Agent upon any Global Warrant Certificate executed by the Company shall be conclusive evidence that such Global Warrant Certificate so countersigned has been duly issued hereunder.
The Warrant Agent shall keep, at an office designated for such purpose, books (the “
Warrant Register
”) in which, subject to such reasonable regulations as it may prescribe, it shall register the Book-Entry Warrants as well as any Global Warrant Certificates and exchanges and transfers of outstanding Warrants in accordance with the procedures set forth in
Section 6
of this Agreement, all in form satisfactory to the Company and the Warrant Agent. No service charge shall be made for any exchange or registration of transfer of the Warrants, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed on the Holder in connection with any such exchange or registration of transfer. The Warrant Agent shall have no obligation to effect an exchange or register a transfer unless and until any payments required by the immediately preceding sentence have been made.
Prior to due presentment for registration of transfer or exchange of any Warrant in accordance with the procedures set forth in this Agreement, the Warrant Agent and the Company may deem and treat the Holder as the absolute owner of such Warrant (notwithstanding any notation of ownership or other writing made in a Global Warrant Certificate by anyone), for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes, and neither the Warrant Agent nor the Company shall be affected by notice to the contrary.
SECTION 6.
Registration of Transfers and Exchanges
.
Transfer
and Exchange of Global Warrant Certificates or Beneficial Interests Therein
. The transfer and exchange of Global Warrant Certificates or beneficial interests therein shall be effected through the Depository, in accordance with this Agreement and the procedures of the Depository therefor.
Exchange of a Beneficial Interest in a Global Warrant Certificate for a Book-Entry Warrant
.
(i)
Any Holder of a beneficial interest in a Global Warrant Certificate may, upon request, exchange such beneficial interest for a Book-Entry Warrant. Upon receipt by the Warrant Agent from the Depository or its nominee of written instructions or such other form of instructions as is customary for the Depository on behalf of any Person having a beneficial interest in a Global Warrant Certificate, the Warrant Agent shall cause, in accordance with the standing instructions and procedures existing between the Depository and Warrant Agent, the number of Warrants represented by the Global Warrant Certificate to be reduced by the number of Warrants to be represented by the Book-Entry Warrants to be issued in exchange for the beneficial interest of such Person in the Global Warrant Certificate and, following such reduction, the Warrant Agent shall
4
register in the name of the Holder a Book-Entry Warrant and deliver to said Warrant Holder a Warrant Statement.
(ii)
Book-Entry Warrants issued in exchange for a beneficial interest in a Global Warrant Certificate pursuant to this
Section 6(b)
shall be registered in such names as the Depository, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Warrant Agent. The Warrant Agent shall deliver such Warrant Statements to the Persons in whose names such Warrants are so registered.
Transfer and Exchange of Book-Entry Warrants
. Book-Entry Warrants surrendered for exchange or for registration of transfer pursuant to clause (i) of this
Section 6(c)
or
Section 6(i)(v)
, shall be cancelled by the Warrant Agent. Such cancelled Book-Entry Warrants shall then be disposed of by or at the direction of the Company in accordance with applicable law. When Book-Entry Warrants are presented to or deposited with the Warrant Agent with a written request:
(iii)
to register the transfer of the Book-Entry Warrants; or
(iv)
to exchange such Book-Entry Warrants for an equal number of Book-Entry Warrants of other authorized denominations;
then in each case the Warrant Agent shall register the transfer or make the exchange as requested if its requirements for such transactions are met;
provided
,
however
, that the Warrant Agent has received a written instruction of transfer in a form satisfactory to the Warrant Agent, duly executed by the Holder thereof or by his attorney, duly authorized in writing. The requirements for such transfer or for exchanges to be issued in a name other than the registered holder shall include,
inter alia
, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association as indicated in Section 6(i)(v) below, and any other reasonable evidence of authority that may be required by the Warrant Agent.
Restrictions on Exchange or Transfer of a Book-Entry Warrant for a Beneficial Interest in a Global Warrant Certificate
. A Book-Entry Warrant may not be exchanged for a beneficial interest in a Global Warrant Certificate except upon satisfaction of the requirements set forth below. Upon receipt by the Warrant Agent of appropriate instruments of transfer with respect to a Book-Entry Warrant, in a form satisfactory to the Warrant Agent, together with written instructions directing the Warrant Agent to make, or to direct the Depository to make, an endorsement on the Global Warrant Certificate to reflect an increase in the number of Warrants represented by the Global Warrant Certificate equal to the number of Warrants represented by such Book-Entry Warrant (such instruments of transfer and instructions to be duly executed by the holder thereof or the duly appointed legal representative thereof or by his attorney, duly authorized in writing, such signatures to be guaranteed by an eligible guarantor institution to the extent required by the Warrant Agent or the Depositary), then the Warrant Agent shall cancel such Book-Entry Warrant on the Warrant Register and cause, or direct the Depository to cause, in accordance with the standing instructions and procedures existing between the Depository and the Warrant Agent, the number of Warrants represented by the Global Warrant Certificate to be increased accordingly. If no Global Warrant Certificates are then outstanding, the Company
5
shall issue and the Warrant Agent shall countersign a new Global Warrant Certificate representing the appropriate number of Warrants.
Restrictions on Exchange or Transfer of Global Warrant Certificates
. Notwithstanding any other provisions of this Agreement (other than the provisions set forth in
Section 6(f)
), unless and until it is exchanged in whole for a Book-Entry Warrant, a Global Warrant Certificate may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.
Book-Entry Warrants
. If at any time:
(v)
the Depository for the Global Warrant Certificates notifies the Company that the Depository is unwilling or unable to continue as Depository for the Global Warrant Certificates and a successor Depository for the Global Warrant Certificates is not appointed by the Company within ninety (90) days after delivery of such notice; or
(vi)
the Company, in its sole discretion, notifies the Warrant Agent in writing that all Warrants shall be exclusively in the form of Book-Entry Warrants;
then the Warrant Agent, upon written instructions signed by an Appropriate Officer of the Company and all other necessary information, shall register Book-Entry Warrants, in an aggregate number equal to the number of Warrants represented by the Global Warrant Certificates, in exchange for such Global Warrant Certificates, in such names and in such amounts as directed by the Depository or, in the absence of instructions from the Depository, the Company.
No Violation of Law
. No Warrants, or Warrant Shares, shall be sold, exchanged or otherwise transferred in violation of the Securities Act or applicable state securities laws. Each Holder, by its acceptance of any Warrant under this Warrant Agreement, acknowledges and agrees that the Warrants (including any Warrant Shares issued upon exercise thereof) were issued pursuant to an exemption from the registration requirement of Section 5 of the Securities Act provided by Section 1145 of the Bankruptcy Code, and to the extent that a Holder is an “underwriter” as defined in Section 1145(b)(1) of the Bankruptcy Code, such Holder may not be able to sell or transfer any Warrant Shares in the absence of an effective registration statement under the Securities Act or an exemption from registration thereunder.
Cancellation of Global Warrant Certificate
. At such time as all beneficial interests in Global Warrant Certificates have either been exchanged for Book-Entry Warrants, redeemed, repurchased or cancelled, all Global Warrant Certificates shall be returned to, or retained and cancelled by, the Warrant Agent, upon written instructions from the Company satisfactory to the Warrant Agent.
Obligations with Respect to Transfers and Exchanges of Warrants
.
(vii)
To permit registrations of transfers and exchanges, the Company shall execute Global Warrant Certificates, if applicable, and the Warrant Agent is hereby authorized, in accordance with the provisions of
Section 5
and this
Section 6
, to
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countersign such Global Warrant Certificates, if applicable, or register Book-Entry Warrants, if applicable, as required pursuant to the provisions of this
Section 6
and for the purpose of any distribution of new Global Warrant Certificates contemplated by
Section 9
or additional Global Warrant Certificates contemplated by
Section 12
.
(viii)
All Book-Entry Warrants and Global Warrant Certificates issued upon any registration of transfer or exchange of Book-Entry Warrants or Global Warrant Certificates shall be the valid obligations of the Company, entitled to the same benefits under this Agreement as the Book-Entry Warrants or Global Warrant Certificates surrendered upon such registration of transfer or exchange.
(ix)
No service charge shall be made to a Holder for any registration, transfer or exchange but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed on the Holder in connection with any such exchange or registration of transfer. Neither the Company nor the Warrant Agent shall be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance of Warrants or any certificates for Warrant Shares in a name other than that of the Holder of the surrendered Warrants, and the Company shall not be required to issue or deliver such Warrants or the certificates representing the Warrant Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Warrant Agent shall have no duty to deliver such Warrants or the certificates representing such Warrant Shares unless and until it is satisfied that all such taxes and charges have been paid.
(x)
So long as the Depository, or its nominee, is the registered owner of a Global Warrant Certificate, the Depository or such nominee, as the case may be, will be considered the sole owner or Holder of the Warrants represented by such Global Warrant Certificate for all purposes under this Agreement. Except as provided in
Sections 6(b)
and
(f)
upon the exchange of a beneficial interest in a Global Warrant Certificate for Book-Entry Warrants, owners of beneficial interests in a Global Warrant Certificate will not be entitled to have any Warrants registered in their names, and will under no circumstances be entitled to receive physical delivery of any such Warrants and will not be considered the owners or Holders thereof under the Warrants or this Agreement. Neither the Company nor the Warrant Agent, in its capacity as registrar for such Warrants, will have any responsibility or liability for any aspect of the records relating to beneficial interests in a Global Warrant Certificate or for maintaining, supervising or reviewing any records relating to such beneficial interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair the operations of customary practices of the Depository governing the exercise of the rights of a holder of a beneficial interest in a Global Warrant Certificate.
(xi)
Subject to
Sections 6(b)
,
(c)
and
(d)
, and this
Section 6(i)
, the Warrant Agent shall, upon receipt of all information required to be delivered hereunder, from time to time to register the transfer of any outstanding Warrants in the Warrant Register, upon
7
surrender of Global Warrant Certificates, if applicable, representing such Warrants at the Warrant Agent Office (as defined below), duly endorsed, and accompanied by a completed form of assignment substantially in the form of
Exhibit C
hereto (or with respect to a Book-Entry Warrant, only such completed form of assignment substantially in the form of
Exhibit C
hereto), duly signed by the Holder thereof or by the duly appointed legal representative thereof or by a duly authorized attorney, such signature to be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program. Upon any such registration of transfer, a new Global Warrant Certificate or a Warrant Statement, as the case may be, shall be issued to the transferee.
SECTION 7.
Duration and Exercise of Warrants
.
Subject to the terms of this Agreement, each Warrant shall be exercisable, in whole or in part, at any time and from time to time beginning after the date hereof (the “
Distribution Date
”) and ending at 5:00 p.m., New York City time, on October 2, 2017 or, if such date is not a Business Day, the next subsequent Business Day (such date, the “
Expiration Date
”). The Company shall promptly provide the Warrant Agent written notice of the Expiration Date. After 5:00 p.m. New York City time on the Expiration Date, the Warrants will become void and of no value, and may not be exercised.
Subject to the provisions of this Agreement, the warrants may be exercised as follows:
(i)
registered Book-Entry Warrant holders must provide written notice of such election (“
Warrant Exercise Notice
”) to exercise the Warrant to the Company and the Warrant Agent at the addresses set forth in
Section 20
no later than 5:00 p.m., New York City time, on the Expiration Date, which Warrant Exercise Notice shall be substantially in the form set forth in
Exhibit B-1
hereto, properly completed and executed by the registered Book-Entry Warrant holder and paying (x) the applicable Exercise Price multiplied by the number of Warrant Shares in respect of which any Warrants are being exercised on the date the notice is provide to the Warrant Agent or (y) in the case of a Cashless Exercise, paying the required consideration in the manner set forth in this
Section 7(b)
, in each case, together with any applicable taxes and governmental charges;
(ii)
for Warrants held through the book-entry facilities of the Depository, (x) a Warrant Exercise Notice to exercise the Warrant must be sent to the Company and the Warrant Agent at the addresses set forth in
Section 20
no later than 5:00 p.m., New York City time, on the Expiration Date, which Warrant Exercise Notice shall be substantially in the form set forth in
Exhibit B-2
hereto, properly completed and executed by the Holder, provided that such written notice may only be submitted with respect to Warrants held through the book-entry facilities of the Depository, by or through Persons that are direct participants in the Depository; (y) such Warrants shall be delivered no later than 5:00 p.m., New York City time, on the Expiration Date, to the Warrant Agent by book-entry transfer through the facilities of the Depository, if such Warrants are represented by a Global Warrant Certificate; and (z) a payment must be made, of (A) the applicable Exercise Price multiplied by the number of Warrant Shares in respect of which any Warrants are being exercised or (B) in the case of a Cashless Exercise (as defined below),
8
the required consideration in the manner set forth in this
Section 7(b)
, in each case, together with any applicable taxes and governmental charges.
To the extent a Warrant Exercise Notice (as defined below) is delivered through the book-entry facilities of the Depository no later than 5:00 p.m., New York City time, on the Expiration Date, but the deliveries and payments specified in clause (ii) above are effected thereafter but no later than 5:00 p.m., New York City time, on the Business Day immediately following the delivery of a Warrant Exercise Notice to the Warrant Agent (and no later than one Business Day after the Expiration Date), the Warrants shall nonetheless be deemed exercised prior to the Expiration Date for the purposes of this Warrant Agreement.
The aggregate Exercise Price shall be payable in lawful money of the United States of America either by certified or official bank or bank cashiers check payable to the order of the Company. The Company acknowledges that the bank accounts maintained by Computershare in connection with the services provided under this Agreement will be in its name and that Computershare may receive investment earnings in connection with the investment at Computershare risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will receive interest on any deposits of Exercise Price.
In lieu of paying the aggregate Exercise Price as set forth in
Section 7(c)
, provided the Common Stock is listed or admitted for trading on a national securities exchange or an over-the-counter market or comparable system, subject to the provisions of this Agreement (including any adjustments made by the Company pursuant to
Section 12(n)
or
Section 12(o)
), each Warrant shall entitle the Holder, at the election of such Holder, to exercise the Warrant by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon exercise of all Warrants being exercised by such Holder at such time which, when multiplied by the Market Price of the Warrant Shares, is equal to the aggregate Exercise Price, and such withheld Warrant Shares shall no longer be issuable under such Warrants (a “
Cashless Exercise
”). The formula for determining the number of Warrant Shares to be issued in a Cashless Exercise is as follows:
X =
(A-B)
x C
A
where:
X = the number of Warrant Shares issuable upon exercise pursuant to this subsection (d).
A = the Market Price of a Warrant Share on the Business Day immediately preceding the date on which the Holder delivers the Warrant Exercise Notice pursuant to subsection (e) below.
B = the Exercise Price.
C = the number of Warrant Shares as to which a Warrant is then being exercised including the withheld Warrant Shares.
If the foregoing calculation results in a negative number, then no Warrant Shares shall be issuable via a Cashless Exercise. The number of Warrant Shares to be issued on such
9
exercise will be determined by the Company (with written notice thereof to the Warrant Agent) using the formula set forth in this
Section 7(d)
. The Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company’s determination of the number of Warrant Shares to be issued on such exercise, pursuant to this
Section 7(d)
, is accurate or correct.
Notwithstanding the foregoing, no Cashless Exercise shall be permitted if, as the result of any adjustment made pursuant to
Section 12
, at the time of such Cashless Exercise, Warrant Shares include a cash component and the Company would be required to pay cash to a Holder upon an exercise of Warrants.
Any exercise of a Warrant pursuant to the terms of this Agreement shall be irrevocable and shall constitute a binding agreement between the Holder and the Company, enforceable in accordance with its terms.
The Warrant Agent shall:
(iii)
examine all Warrant Exercise Notices and all other documents delivered to it by or on behalf of the Holders as contemplated hereunder to ascertain whether or not, on their face, such Warrant Exercise Notices and any such other documents have been executed and completed in accordance with their terms and the terms hereof;
(iv)
where a Warrant Exercise Notice or other document appears on its face to have been improperly completed or executed or some other irregularity in connection with the exercise of the Warrants exists, the Warrant Agent shall endeavor to inform the appropriate parties (including the Person submitting such instrument) of the need for fulfillment of all requirements, specifying those requirements which appear to be unfulfilled;
(v)
inform the Company of and cooperate with and assist the Company in resolving any discrepancies between Warrant Exercise Notices received and delivery of Warrants to the Warrant Agent’s account;
(vi)
advise the Company no later than four Business Days after receipt of a Warrant Exercise Notice, of (i) the receipt of such Warrant Exercise Notice and the number of Warrants exercised in accordance with the terms and conditions of this Agreement, (ii) the instructions with respect to delivery of the shares of Common Stock of the Company deliverable upon such exercise, subject to timely receipt from the Depository of the necessary information, and (iii) such other information as the Company shall reasonably require; and
(vii)
subject to Common Stock being made available to the Warrant Agent by or on behalf of the Company for delivery to the Depository, liaise with the Depository and endeavor to effect such delivery to the relevant accounts at the Depository in accordance with its requirements.
All questions as to the validity, form and sufficiency (including time of receipt) of a Warrant Exercise Notice will be determined by the Company in its sole discretion, which determination shall be final and binding. The Warrant Agent shall incur no liability for or in respect of such determination by the Company. The Company reserves the right to reject any and all Warrant
10
Exercise Notices not in proper form or for which any corresponding agreement by the Company to exchange would, in the opinion of the Company, be unlawful. Such determination by the Company shall be final and binding on the Holders, absent manifest error. Moreover, the Company reserves the absolute right to waive any of the conditions to the exercise of Warrants or defects in Warrant Exercise Notices with regard to any particular exercise of Warrants. Neither the Company nor the Warrant Agent shall be under any duty to give notice to the Holders of the Warrants of any irregularities in any exercise of Warrants, nor shall it incur any liability for the failure to give such notice.
As soon as practicable after the exercise of any Warrant as set forth in subsection (e), the Company shall issue, or otherwise deliver, or cause to be issued or delivered, in authorized denominations to or upon the order of the Holder of the Warrants, either:
(viii)
if such Holder holds the Warrants being exercised through the Depository’s book-entry transfer facilities, the Warrant Shares will be credited to the Depository within three Business Days, provided that the Company has instructed the Warrant Agent on the number of Warrant Shares to issue for Cashless Exercise in a timely manner (but in no event later than three Business Days after such instruction is received by the Warrant Agent), for the account of such Holder or for the account of a participant in the Depository the number of Warrant Shares to which such Holder is entitled, in each case registered in such name and delivered to such account as directed in the Warrant Exercise Notice by such Holder or by the direct participant in the Depository through which such Holder is acting, or
(ix)
if such Holder holds the Warrants being exercised in the form of Book-Entry Warrants, a book-entry interest in the Warrant Shares registered on the books of the Company’s transfer agent or, at the Company’s option, by delivery to the address designated by such Holder in its Warrant Exercise Notice of a physical certificate representing the number of Warrant Shares to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder. Such Warrant Shares shall be deemed to have been issued and any Person so designated to be named therein shall be deemed to have become a Holder as of the close of business on the date of the delivery thereof. If less than all of the Warrants evidenced by a Global Warrant Certificate surrendered upon the exercise of Warrants are exercised at any time prior to the date of expiration for the Warrants, a new Global Warrant Certificate or Certificates shall be issued for the remaining number of Warrants evidenced by the Global Warrant Certificate so surrendered, and the Warrant Agent is hereby authorized to countersign the required new Global Warrant Certificate or Certificates pursuant to the provisions of
Section 5
and this
Section 7
. The Person in whose name any certificate or certificates for the Warrant Shares are to be issued (or such Warrant Shares are to be registered, in the case of a book-entry transfer) upon exercise of a Warrant shall be deemed to have become the Holder of such Warrant Shares on the date such Warrant Exercise Notice is delivered.
SECTION 8.
Cancellation of Warrants
. Upon the Expiration Date (if not already properly exercised), or if the Company shall purchase or otherwise acquire Warrants, the Global Warrant Certificates and the Book-Entry Warrants representing such Warrants shall thereupon be delivered to the Warrant Agent, if applicable, and be cancelled by it and retired. The Warrant
11
Agent shall cancel all Global Warrant Certificates surrendered for exchange, substitution, transfer or exercise in whole or in part. Such cancelled Global Warrant Certificates shall thereafter be disposed of in a manner satisfactory to the Company provided in writing to the Warrant Agent. The Warrant Agent shall by the end of each day or on the next Business Day following each day on which Warrants were exercised, advise an authorized representative of the Company, as directed by the Company, of (i) the number of shares of Common Stock issued upon exercise of a Warrant, (ii) the delivery of Global Warrant Certificates evidencing the balance, if any, of the shares of Common Stock issuable after such exercise of the Warrant and (iii) such other information as the Company shall reasonably require. The Warrant Agent will pay to the Company all available funds received by the Warrant Agent in payment of the aggregate Exercise Price no later than two Business Day after such amounts are received by the Warrant Agent. The Warrant Agent promptly shall confirm such information to the Company in writing. The Warrant Agent shall keep copies of this Warrant Agreement and any notices given or received hereunder.
SECTION 9.
Mutilated or Missing Global Warrant Certificates
. If any of the Global Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Warrant Agent shall countersign and deliver, in exchange and substitution for and upon cancellation of the mutilated Global Warrant Certificate, or in lieu of and substitution for the Global Warrant Certificate lost, stolen or destroyed, a new Global Warrant Certificate of like tenor and representing an equivalent number of Warrants, but only upon receipt of evidence reasonably satisfactory to the Warrant Agent of the loss, theft or destruction of such Global Warrant Certificate and an affidavit or the posting of an indemnity or bond, if requested by either the Company or the Warrant Agent, also satisfactory to them. Applicants for such substitute Global Warrant Certificates shall also comply with such other reasonable regulations and pay such other reasonable charges as the Company or the Warrant Agent may prescribe and as required by Section 8-405 of the Uniform Commercial Code as in effect in the State of New York.
SECTION 10.
Reservation of Warrant Shares
. For the purpose of enabling it to satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the Company will, at all times through the Expiration Date, reserve and keep available, free from preemptive rights and out of its aggregate authorized but unissued or treasury shares of Common Stock, shares of Common Stock equal to the number of Warrant Shares deliverable upon the exercise of all outstanding Warrants, and the transfer agent for the Company’s Common Stock (such agent, in such capacity, as may from time to time be appointed by the Company, the “
Transfer Agent
”) is hereby irrevocably authorized and directed at all times to reserve such number of authorized and unissued or treasury shares of Common Stock as shall be required for such purpose. The Company will keep a copy of this Agreement on file with such Transfer Agent and with every transfer agent for any Warrant Shares issuable upon the exercise of Warrants pursuant to
Section 7
. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from such Transfer Agent stock certificates issuable upon exercise of outstanding Warrants, and the Company will supply such Transfer Agent with duly executed stock certificates for such purpose.
The Company covenants that all Warrant Shares issued upon exercise of the Warrants will, upon issuance in accordance with the terms of this Agreement, be fully paid and nonassessable and free from all taxes, liens, charges and security interests created by or imposed upon the Company with respect to the issuance and holding thereof.
12
SECTION 11.
Stock Exchange Listings
. So long as any Warrants remain outstanding and the Common Stock is listed on a national securities exchange or over-the-counter market, the Company will use commercially reasonable efforts to list the Warrants on the same securities exchange or over-the-counter market as the Common Stock, or if the Warrants cannot be listed on such securities exchange or over-the-counter market, any other securities exchange or over-the-counter market acceptable to the Company’s Board of Directors (including OTCQX);
provided
,
however
, the Company shall not be required to use such efforts if the Warrants do not meet the applicable listing requirements.
SECTION 12.
Adjustment of Exercise Price and Number of Warrant Shares Purchasable or Number of Warrants
. The applicable Exercise Price, the number of Warrant Shares purchasable upon the exercise of each Warrant and the number of Warrants outstanding are subject to adjustment from time to time upon the occurrence of the events enumerated in this
Section 12
.
Stock Splits, Combinations, etc
. In case the Company shall hereafter (A) pay a dividend or make a distribution on any of its Common Stock Equivalents (as defined below) in shares of its capital stock (whether Common Stock of shares of another class), (B) subdivide any of its outstanding Common Stock Equivalents or (C) combine any of its outstanding Common Stock Equivalents into a smaller number of shares, each Warrant Number in effect immediately prior to such action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of capital stock of the Company which such Holder would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this paragraph shall become effective immediately after the record date in the case of a dividend and shall become effective immediately after the effective date in the case of a subdivision or combination. If, as a result of an adjustment made pursuant to this paragraph, the Holder of any Warrant thereafter exercised shall become entitled to receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of each adjusted Exercise Price between or among shares of such classes of capital stock.
For the purpose of this Agreement, “
Common Stock Equivalents
” at any time shall mean the aggregate of all shares of Common Stock of the Company and any other equity securities of the Company on parity (with respect to dividends) with such shares. At any time when the number of Common Stock Equivalents is required to be determined, such number shall be equal to the number of shares that have been issued and are outstanding at such time;
provided
, that if any Common Stock Equivalents are entitled to a greater amount of dividends per share than that applicable to the shares of Common Stock, the number of such shares shall be appropriately adjusted to equal the number of shares which would be outstanding if shares of Common Stock Equivalents received dividends at the same rate as the shares of Common Stock.
Issuance of Options or Convertible Securities
. Except in connection with (x) the conversion or exercise of any outstanding Options (as defined below) or Convertible Securities (as defined below) of the Company (as such Options and Convertible Securities are in effect on the date of the issuance of any Warrants) or the Warrants, (y) with respect to any securities or equity awards granted under any equity incentive plans adopted by the Board of Directors of the Company for the benefit of employees, directors, independent contractors or similar Persons, the scope and terms of which are, in the good faith determination of the Board of Directors of the Company,
13
customary for similarly situated businesses in the industry (“
Approved Option Plans
”) or (z) with respect to the offering of any rights (which rights shall also attach to, and be issuable to holders of shares of common stock on a rateable basis with other Common Stock Equivalents) pursuant to a stockholder’s rights plan which may be adopted by the Company unless and until such date, if any, upon which the rights become effective or are triggered and cannot be redeemed by the Company at its option for nominal consideration (at which time the appropriate adjustments shall be made pursuant to this
Section 12
), in the event the Company shall, at any time or from time to time after the date hereof, issue, sell, distribute or otherwise grant in any manner (including by assumption) any rights to subscribe for or to purchase, or any warrants or options for the purchase of, any Common Stock Equivalents or any stock or securities convertible into or exchangeable for any Common Stock Equivalents (any such rights, warrants or options being herein called “
Options
” and any such convertible or exchangeable stock or securities being herein called “
Convertible Securities
”) or any Convertible Securities (other than upon exercise of any Option), whether or not such Options or the rights to convert or exchange such Convertible Securities are immediately exercisable, and the price per share at which such Common Stock Equivalents are issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities (determined by dividing (i) the aggregate amount if any, received or receivable by the Company as consideration for the issuance, sale, distribution or granting of such Options or any such Convertible Security, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of all such Options or upon conversion or exchange of all such Convertible Securities, plus, in the case of Options to acquire Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the conversion or exchange of all such Convertible Securities, by (ii) the total maximum number of shares of Common Stock Equivalents issuable upon the exercise of all such Options or upon the conversion or exchange of all such Convertible Securities or upon the conversion or exchange of all Convertible Securities issuable upon the exercise of all such Options) shall be less than ninety percent (90%) of the Market Price per share of Common Stock on the record date for the issuance, sale, distribution or granting of such Options or Convertible Security (any such event being herein called a “
Distribution
”) then, effective upon such Distribution, the Exercise Price shall be reduced to the price (calculated to the nearest cent) determined by multiplying such Exercise Price in effect immediately prior to such Distribution by a fraction, the numerator of which shall be the sum of (i) the number of shares constituting Common Stock Equivalents outstanding (exclusive of any treasury shares) immediately prior to such Distribution plus (ii) the number of shares which the aggregate consideration, if any, received (or to be received upon exercise) by the Company would purchase at such Market Price, and the denominator of which shall be the product of (A) the total number of shares of Common Stock Equivalents outstanding (exclusive of any treasury shares) immediately prior to such Distribution plus (B) the total number of shares constituting Common Stock Equivalents issuable upon exercise of all such Options or upon conversion or exchange of all Convertible Securities. For purposes of the foregoing, the total maximum number of shares constituting Common Stock Equivalents issuable upon exercise of all such Options or upon conversion or exchange of all such Convertible Securities or upon the conversion or exchange of the total maximum amount of the Convertible Securities issuable upon the exercise of all such Options shall be deemed to have been issued as of the date of such Distribution and thereafter shall be deemed to be outstanding and the Company shall be deemed to have received as consideration therefor such price per share, determined as provided above. Except as provided in
Sections 12(i)
and
(j)
below, no additional adjustment of the Exercise Price or Warrant Number shall be made upon the actual exercise of such Options or upon conversion or exchange of the Convertible Securities or upon
14
the conversion or exchange of the Convertible Securities issuable upon the exercise of such Options.
Dividends and Distributions
. In the event the Company shall, at any time or from time to time after the date hereof, distribute to the holders of Common Stock Equivalents (other than the Warrants) any dividend or other distribution of cash, evidences of its indebtedness, other securities or other properties or assets, or any options, warrants or other rights to subscribe for or purchase any of the foregoing (in each case other than (i) dividends or distributions of Common Stock Equivalents, Options or Convertible Securities that are referred to in
Section 12(a)
or
Section 12(b)
and (ii) any cash dividend from current or retained earnings), then the Exercise Price shall be decreased to a price determined by multiplying the Exercise Price then in effect by a fraction, the numerator of which shall be the Market Price per share of Common Stock on the record date for such distribution less the sum of (A) the cash portion, if any, of such distribution per share of Common Stock outstanding (exclusive of any treasury shares) on the record date for such distribution plus (B) the then fair market value (as determined in good faith by the Board of Directors of the Company) per share of Common Stock outstanding (exclusive of any treasury shares) on the record date for such distribution of that portion, if any, of such distribution consisting of evidences of indebtedness, other securities, properties, assets, Options, warrants or subscription or purchase rights, and the denominator of which shall be such Market Price per share of Common Stock. The adjustments required by this
Section 12(c)
shall be made whenever any such distribution occurs retroactive to the record date for the determination of stockholders entitled to receive such distribution.
Issuance of Additional Shares of Common Stock
. If at any time the Company shall (except as hereinafter provided) issue or sell any Common Stock Equivalents issued after the date hereof except in connection with (i) the conversion or exercise of any outstanding Options or Convertible Securities of the Company (as such Options and Convertible Securities are in effect on the date of the issuance of any Warrants) or the Warrants, (ii) the issuance of any Common Stock Equivalents upon the conversion or exercise of any Option or other rights granted under Approved Option Plans; (iii) the offering of any rights (which rights shall also attach to, and be issuable to holders of shares of Common Stock on a rateable basis with other Common Stock Equivalents) pursuant to a stockholder’s rights plan which may be adopted by the Company unless and until such date, if any, upon which the rights become effective or are triggered and cannot be redeemed by the Company at its option for nominal consideration (at which time the appropriate adjustments shall be made pursuant to this
Section 12
) or (iv) Common Stock Equivalents issued pursuant to or upon stock splits, combinations or dividends or other transactions described in this
Section 12
(after giving effect to any adjustments required to be made by this Section) (such Common Stock Equivalents, “
Additional Shares
”), for consideration in an amount per Additional Share less than ninety percent (90%) of the Market Price per share constituting Common Stock Equivalents, then each Warrant Number shall be adjusted to equal the product obtained by multiplying the Warrant Number immediately prior to such issuance or sale by a fraction (A) the numerator of which shall be the number of shares constituting Common Stock Equivalents outstanding immediately after such issuance or sale (on a fully-diluted basis), and (B) the denominator of which shall be the sum of (x) the number of shares of Common Stock Equivalents which the aggregate consideration received by the Company in connection with such issuance or sale of Additional Shares would purchase at the then current Market Price per share constituting Common Stock Equivalent,
plus
(y) the number of shares constituting Common Stock Equivalents outstanding immediately prior to such issuance or sale of Additional Shares
15
(on a fully-diluted basis). For the purposes of this
Section 12(d)
, the date as of which the Market Price per share constituting Common Stock Equivalents shall be computed shall be the earlier of (a) the first Business Day on which the Company shall be able to determine the Market Price per share constituting Common Stock Equivalents pursuant to the terms of a firm contract for the issuance of such Additional Shares or (b) the date of actual issuance of such Additional Shares.
Certain Distributions
. If the Company shall pay a dividend or make any other distribution to holders of Common Stock Equivalents payable in Options or Convertible Securities, then, for purposes of
Section 12(d)
above, such Options or Convertible Securities shall be deemed to have been issued or sold without consideration.
Consideration Received
. If any shares constituting Common Stock Equivalents, Options or Convertible Securities shall be issued, sold or distributed for a consideration other than cash, the amount of the consideration other than cash received by the Company in respect thereof shall be deemed to be the then fair market value of such consideration (as determined in good faith by the Board of Directors of the Company). If any Options shall be issued in connection with the issuance and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued without consideration;
provided
,
however
, that if such Options have an exercise price equal to or greater than the Market Price of the respective securities receivable upon the exercise thereof on the date of issuance of such Options, then such Options shall be deemed to have been issued for consideration equal to such exercise price.
Deferral or Exclusion of Certain Adjustments
. No adjustment to the Exercise Price or Warrant Number shall be required hereunder unless such adjustment together with other adjustments carried forward as provided below, would result in an increase or decrease of at least one percent (1%) of the applicable Exercise Price or Warrant Number;
provided
, that any adjustments which by reason of this
Section 12(g)
are not required to be made shall be carried forward and taken into account in any subsequent adjustment. No adjustment need be made for a change in the par value of the shares of Common Stock or any other Common Stock Equivalents. All calculations under this Section shall be made to the nearest one one thousandth (1/1,000
th
) of one cent ($0.01) or to the nearest one one thousandth (1/1,000
th
) of a share, as the case may be.
Changes in Options and Convertible Securities
. If the exercise price provided for in any Options referred to in
Section 12(b)
above, the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to in
Section 12(b)
above, or the rate at which any Convertible Securities referred to in
Section 12(b)
above are convertible into or exchangeable for Common Stock Equivalents shall change at any time (other than under or by reason of provisions designed to protect against dilution upon an event which results in a related adjustment pursuant to this
Section 12
), the Exercise Price then in effect and the Warrant Number shall forthwith be readjusted (effective only with respect to any exercise of any Warrant after such readjustment) to such Exercise Price and Warrant Number that would then be in effect had the adjustment made upon the issuance, sale, distribution or granting of such Options or Convertible Securities been made based upon such changed purchase price, additional consideration or conversion rate, as the case may be, but only with respect to such Options and Convertible Securities as then remain outstanding.
16
Expiration of Options and Convertible Securities
. If, at any time after any adjustment to the Exercise Price or the Warrant Number shall have been made pursuant to
Sections 12(a)
,
12(d)
, or
12(h)
above or this
Section 12(i)
, any Options or Convertible Securities shall have expired unexercised, been terminated, redeemed or no longer be outstanding, the number of such shares so purchasable shall, upon such expiration, be readjusted and shall thereafter be such as it would have been had it been originally adjusted (or had the original adjustment not been required, as the case may be) as if (i) the only shares constituting Common Stock Equivalents deemed to have been issued in connection with such Options or Convertible Securities were the shares constituting Common Stock Equivalents, if any, actually issued or sold upon the exercise of such Options or Convertible Securities and (ii) such shares constituting Common Stock Equivalents, if any, were issued or sold for the consideration actually received by the Company upon such exercise plus the aggregate consideration, if any, actually received by the Company for the issuance, sale, distribution or granting of all such Options or Convertible Securities, whether or not exercised;
provided
, that no such readjustment shall have the effect of decreasing the number of such shares so purchasable by an amount (calculated by adjusting such decrease to account for all other adjustments made pursuant to this
Section 12
following the date of the original adjustment referred to above) in excess of the amount of the adjustment initially made in respect of the issuance, sale, distribution or granting of such Options or Convertible Securities.
Other Adjustments
. In the event that at any time, as a result of an adjustment made pursuant to this
Section 12
, the Holders shall become entitled to receive any securities of the Company other than shares of Common Stock, thereafter the number of such other securities so receivable upon the exercise of any Warrants and the relevant Exercise Price applicable to such exercise shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this
Section 12
.
Other Action Affecting Common Stock Equivalents
. In case at any time or from time to time the Company shall take any action in respect of any of its Common Stock Equivalents, other than any action described in this
Section 12
, then the number of shares of Common Stock or other stock for which each Warrant is exercisable shall be adjusted in such manner determined by the Board of Directors of the Company in its sole discretion. If the Company shall at any time and from time to time issue or sell (i) any shares of any class constituting Common Stock Equivalents other than shares of Common Stock, (ii) any evidences of its indebtedness, shares of stock or other securities which are convertible into or exchangeable for Common Stock Equivalents, with or without the payment of additional consideration in cash or property or (iii) any warrants or other rights to subscribe for or purchase any such Common Stock Equivalents or any such evidences, shares of stock or other securities, then in each such case such issuance shall be deemed to be of, or in respect of, shares of Common Stock for purposes of this
Section 12
.
Public Offering
. No adjustment shall be made in connection with the issuance of Common Stock Equivalents or other securities in a bona fide public offering pursuant to a firm commitment underwriting by a firm which is a member of the National Association of Securities Dealers, Inc.
Other Excluded Equity Issuances
. No adjustment shall be made in connection with the issuance of Common Stock Equivalents or other securities (i) to lenders with respect to any loans made by such lenders to the Company or (ii) as consideration for or to fund the acquisition of any business or asset.
17
Subject Transactions
. Notwithstanding anything else in this Warrant Agreement to the contrary, if the Company engages in a Subject Transaction the following provisions shall apply:
(i)
In the event that the Subject Transaction results in the holders of Common Stock receiving consideration entirely in cash or Other Property, upon the closing of the Subject Transaction and compliance with the Subject Transaction Notice Procedures, each Warrant shall be redeemed and cancelled in all respects, and the holder of each such Warrant shall be entitled to receive, no later than twenty five (25) days after the Redemption Determination Date, the Cash Redemption Consideration.
(ii)
In the event that the Subject Transaction results in the holders of Common Stock receiving consideration of both (i) cash or Other Property and (ii) equity securities:
(1)
If on the Redemption Determination Date the Net Exercise Value of a subject Warrant would be zero or a negative number, upon the closing of the Subject Transaction and compliance with the Subject Transaction Notice Procedures, the holder of each Warrant shall be entitled to receive, upon the exercise thereof in accordance with the terms of this Warrant Agreement, the equity securities, cash and/or Other Property to which the holder of the number of shares of Common Stock then deliverable upon the exercise or conversion of such Warrant would have been entitled to receive upon the consummation of such Subject Transaction, and the Company shall take such steps in connection with the consummation of such Subject Transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable (including the adjustment provisions of this
Section 12
), as nearly as reasonably may be, in relation to any securities, cash and other property thereafter deliverable upon the exercise of the Warrants (and in such instance, the Company or the successor person, as the case may be, shall execute and deliver to the Warrant Agent a supplemental agreement so providing and providing that the successor corporation assumes all of the duties and obligations of the Company under this Warrant Agreement)
(2)
If on the Redemption Determination Date the Net Exercise Value would be a positive number, upon the closing of the Subject Transaction and compliance with the Subject Transaction Notice Procedures, each Warrant shall be redeemed and cancelled in all respects, and the holder of each such Warrant shall be entitled to receive, no later than twenty five (25) days after the Redemption Determination Date, an amount equal to the Net Exercise Value, with such Net Exercise Value being paid in the same proportion of cash, Other Property and equity securities, of the type received (or to be received) by the holders of Common Stock in the Subject Transaction, as received (or to be received) in the aggregate by the holders of Common Stock in the Subject Transaction.
(iii)
In the event that the Subject Transaction results in the holders of Common Stock receiving consideration entirely in equity securities:
(1)
If on the Redemption Determination Date the Net Exercise Value of a subject Warrant would be zero or a negative number, upon the closing of the
18
Subject Transaction and compliance with the Subject Transaction Notice Procedures, the holder of each Warrant shall be entitled to receive, upon the exercise thereof in accordance with the terms of this Warrant Agreement, the equity securities to which the holder of the number of shares of Common Stock then deliverable upon the exercise or conversion of such Warrant would have been entitled to receive upon the consummation of such Subject Transaction, and the Company shall take such steps in connection with the consummation of such Subject Transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable (including the adjustment provisions of this
Section 12
), as nearly as reasonably may be, in relation to any equity securities thereafter deliverable upon the exercise of the Warrants (and in such instance, the Company or the successor person, as the case may be, shall execute and deliver to the Warrant Agent a supplemental agreement so providing and providing that the successor corporation assumes all of the duties and obligations of the Company under this Warrant Agreement);
(2)
If on the Redemption Determination Date the Net Exercise Value would be a positive number, upon the closing of the Subject Transaction and compliance with the Subject Transaction Notice Procedures, each Warrant shall be redeemed and cancelled in all respects, and the holder of each such Warrant shall be entitled to receive, no later than twenty five (25) days after the Redemption Determination Date, an amount equal to the Net Exercise Value, with such amount being paid in the same proportion of equity securities of the type received (or to be received) by the holders of Common Stock in the Subject Transaction as received (or to be received) in the aggregate by the holders of Common Stock in the Subject Transaction.
(iv)
Defined Terms with Respect to Subject Transactions:
(1)
“
Cash Redemption Consideration
” shall mean: (x) $0.01 per Warrant, if on the Redemption Determination Date the Net Exercise Value of a subject Warrant would be zero or a negative number or (y) if on the Redemption Determination Date the Net Exercise Value of a subject Warrant would be a positive number, the Net Exercise Value per Warrant in (1) cash (if no Other Property is received (or to be received) by the Holders of Common Stock in the Subject Transaction) or (2) if Other Property is received (or to be received) by the Holders of Common Stock in the Subject Transaction, the same proportion of cash and Other Property, of the type received (or to be received) by the holders of Common Stock in the Subject Transaction, as received (or to be received) in the aggregate by the holders of Common Stock in the Subject Transaction.
(2)
“
Net Exercise Value
” shall mean the difference on the relevant measurement date between (A) the product of (1) the number of shares of Common Stock into which each Warrant is then exercisable and (2) (x) the cash and/or Other Property per share of Common Stock received in an all-cash/Other Property Subject Transaction (with such Other Property valued at its Market Price), or (y) the Market Price of the equity security consideration per share of Common Stock received in an all-equity security Subject Transaction or (z) if the
19
consideration in the Subject Transaction is a mix of cash, Other Property and equity securities, the aggregate Market Price of the consideration per share of Common Stock,
less
(B) the Exercise Price of each Warrant.
(3)
“
Redemption Determination Date
” means the date that is the closing date of a relevant Subject Transaction.
(4)
“
Subject Transaction
” shall mean any one of the following transactions: (x) the sale of all or substantially all of the Company’s consolidated assets to any Person (other than a subsidiary of the Company of which the Company owns at least 85% of the voting securities), (y) the acquisition by any Person (other than a subsidiary of the Company of which the Company owns at least 85% of the voting securities) of a majority of the outstanding Common Stock, or (z) a merger or consolidation by the Company with or into another Person in which the holders of the Common Stock immediately prior to the merger or consolidation are not holders, directly or indirectly, of at least a majority of the voting securities of the entity surviving such merger or consolidation immediately after such merger or consolidation.
(5)
“
Subject Transaction Notice Procedures
” shall mean the Company’s delivery of written notice to holders of Warrants setting forth any action to be taken by the Company that may constitute a Subject Transaction, the resulting effect of such action on the Warrants, and the amount of cash and/or the number and kind of securities or other property to be received by the holders of Warrants pursuant to such Subject Transaction (if any). Such notice shall be delivered by the Company (including by directing the Warrant Agent to so deliver) to holders of Warrants at such holders’ addresses appearing on the Warrant Register (and with respect to holders of beneficial interests in Global Warrant Certificates, to the Depository), and shall be delivered on a date calculated and by a method chosen by the Company to reasonably ensure that such notice shall be actually received by the holders of Warrants on or prior to the Redemption Determination Date.
(v)
The provisions of this subsection
(o)
shall similarly apply to successive Subject Transactions.
(vi)
Notwithstanding anything to the contrary in this
Section 12(n)
, any property received by holders of Common Stock in a Subject Transaction that is neither cash nor equity securities (“
Other Property
”) shall be treated as cash consideration for all purposes of this
Section 12(n)
in an amount equal to the Market Price of such Other Property.
Consolidation, Merger or Sale of Assets Other than a Subject Transaction
. If the Company shall at any time consolidate with or merge into another Person (other than a Subject Transaction) or recapitalize or reclassify its Common Stock Equivalents, in each case in such a way that the holders of Common Stock Equivalents are entitled to receive (either directly or upon subsequent liquidation) securities and/or property with respect to or in exchange for Common Stock Equivalents, the holder of any Warrants will thereafter receive, upon the exercise thereof in
20
accordance with the terms of this Warrant Agreement, the securities or property to which the holder of the number of shares of Common Stock then deliverable upon the exercise or conversion of such Warrants would have been entitled upon such consolidation, merger, recapitalization or reclassification, and the Company shall take such steps in connection with such consolidation, merger, recapitalization or reclassification as may be necessary to assure that the provisions hereof shall thereafter be applicable (including the adjustment provisions of this
Section 12
), as nearly as reasonably may be, in relation to any securities or property thereafter deliverable upon the exercise of the Warrants. The Company or the successor Person, as the case may be, shall execute and deliver to the Warrant Agent a supplemental agreement so providing. In addition, such supplemental agreement shall provide that the successor Person assumes all of the duties and obligations of the Company under this Warrant Agreement. A sale of all or substantially all the assets of the Company (other than a Subject Transaction) for consideration (apart from the assumption of obligations) consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. The provisions of this
Section 12(o)
shall similarly apply to successive mergers or consolidations or sales or other transfers.
SECTION 13.
Fractional Warrant Shares
. Notwithstanding any adjustment pursuant to
Section 12
in the number of Warrant Shares purchasable upon the exercise of a Warrant, the Company shall not be required to issue Warrants to purchase fractions of Warrant Shares, or to issue fractions of Warrant Shares upon exercise of the Warrants, or to distribute certificates which evidence fractional Warrant Shares. If more than one Warrant shall be presented for exercise in full at the same time by the same Holder, the number of full Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrants so presented. If any fraction of a Share would, except for the provisions of this
Section 13
, be issuable on the exercise of any Warrants (or specified portion thereof), the Company shall pay an amount in cash equal to the Market Price per share of Common Stock, as determined on the day immediately preceding the date on which the Holder delivered the applicable Warrant Exercise Notice, multiplied by such fraction, computed to the nearest whole U.S. cent. Whenever a payment for fractional Warrant Shares is to be made by the Warrant Agent, the Company shall (i) promptly prepare and deliver to the Warrant Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Warrant Agent in the form of fully collected funds to make such payments. The Warrant Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for Warrant Shares under any Section of this Agreement relating to the payment of fractional Warrant Shares unless and until the Warrant Agent shall have received such a certificate and sufficient monies.
SECTION 14.
Redemption
. The Warrants shall not be redeemable by the Company or any other Person.
SECTION 15.
Notices to Warrantholders
. Upon any adjustment of (i) the number of Warrant Shares purchasable upon exercise of each Warrant, (ii) the Exercise Price or (iii) the number of Warrants outstanding including any adjustment pursuant to
Section 12
, the Company, within twenty (20) Business Days thereafter, shall (x) cause to be filed with the Warrant Agent a certificate signed by an Appropriate Officer of the Company setting forth the event giving rise to such adjustment, such Exercise Price and either the number of Warrant Shares purchasable upon
21
exercise of each Warrant or the additional number of Warrants to be issued for each previously outstanding Warrant, as the case may be, after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such adjustment was made, which certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (y) direct the Warrant Agent to give written notice to each of the registered Holders at such Holder’s address appearing on the Warrant Register. Where appropriate, such notice may be given in advance and included as a part of the notice required to be mailed under the other provisions of this
Section 15
. The Warrant Agent shall be fully protected in relying on any such certificate and in making any adjustment described therein and shall have no duty with respect to, and shall not be deemed to have knowledge of, any adjustment unless and until it shall have received such a certificate, in each case, absent fraud, recklessness, bad faith or willful misconduct (each as determined by a final non-appealable order, judgment, ruling or decree of a court of competent jurisdiction).
If:
the Company proposes to take any action that would require an adjustment pursuant to
Section 12
(unless no adjustment is required pursuant to
Section 12(g)
); or
there shall be a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation, merger or sale of all or substantially all of its property, assets and business as an entirety).
then the Company shall cause written notice of such event to be filed with the Warrant Agent and shall cause written notice of such event to be given to each of the Holders at such Holder’s address appearing on the Warrant Register, such giving of notice to be completed at least ten (10) Business Days prior to the effective date of such action (or the applicable record date for such action if earlier). Such notice shall specify the proposed effective date of such action and, if applicable, the record date and the material terms of such action. The failure to give the notice required by this
Section 15
or any defect therein shall not affect the legality or validity of any action, distribution, right, warrant, dissolution, liquidation or winding up or the vote upon or any other action taken in connection therewith.
SECTION 16.
Merger, Consolidation or Change of Name of Warrant Agent
. Any Person into which the Warrant Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Warrant Agent is a party, or any Person succeeding to the shareholder services business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent hereunder without the execution or filing of any document or any further act on the part of any of the parties hereto, if such Person would be eligible for appointment as a successor Warrant Agent under the provisions of
Section 18
. If any of the Global Warrant Certificates have been countersigned but not delivered at the time such successor to the Warrant Agent succeeds under this Agreement, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent; and if at that time any of the Global Warrant Certificates shall not have been countersigned, any successor to the Warrant Agent may countersign such Global Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Global Warrant Certificates shall have the full force provided in the Global Warrant Certificates and in this Agreement.
22
If at any time the name of the Warrant Agent is changed and at such time any of the Global Warrant Certificates have been countersigned but not delivered, the Warrant Agent whose name has changed may adopt the countersignature under its prior name; and if at that time any of the Global Warrant Certificates have not been countersigned, the Warrant Agent may countersign such Global Warrant Certificates either in its prior name or in its changed name; and in all such cases such Global Warrant Certificates shall have the full force provided in the Global Warrant Certificates and in this Agreement.
SECTION 17.
Warrant Agent
. The Warrant Agent undertakes only the duties and obligations expressly imposed by this Agreement and the Global Warrant Certificates, in each case upon the following terms and conditions, by all of which the Company and the Holders, by their acceptance thereof, shall be bound:
The statements contained herein and in the Global Warrant Certificates shall be taken as statements of the Company, and the Warrant Agent assumes no responsibility for the accuracy of any of the same except to the extent that such statements describe the Warrant Agent or action taken or to be taken by the Warrant Agent. Except as expressly provided herein, the Warrant Agent assumes no responsibility with respect to the execution, delivery or distribution of the Global Warrant Certificates.
The Warrant Agent shall not be responsible for any failure of the Company to comply with any of the covenants contained in this Agreement or in the Global Warrant Certificates to be complied with by the Company, nor shall it at any time be under any duty or responsibility to any Holder to make or cause to be made any adjustment in the Exercise Price or in the Warrant Number (except as instructed in writing by the Company), or to determine whether any facts exist that may require any such adjustments, or with respect to the nature or extent of or method employed in making any such adjustments when made.
The Warrant Agent may consult at any time with counsel satisfactory to it (who may be counsel for the Company or an employee of the Warrant Agent), and the advice or opinion of such counsel will be full and complete authorization and protection to the Warrant Agent as to any action taken, suffered or omitted by it in accordance with such advice or opinion, absent fraud, recklessness, bad faith or willful misconduct in the selection and continued retention of such counsel and the reliance on such counsel’s advice or opinion.
The Warrant Agent shall incur no liability or responsibility to the Company or to any Holder for any action taken in reliance on any written notice, resolution, waiver, consent, order, certificate or other paper, document or instrument believed by it to be genuine and to have been signed, sent or presented by the proper party or parties
.
The Warrant Agent shall not take any instructions or directions except those given in accordance with this Agreement, and the Warrant Agent shall be indemnified and held harmless for acting on any such instructions, including, without limitation, instructions given pursuant to the terms of this Agreement by persons other than the Company.
The Company agrees to pay to the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent under this Agreement as set forth in
Exhibit D
, to reimburse the Warrant Agent upon demand for all reasonable out-of-pocket expenses, including counsel fees and other disbursements, incurred by the Warrant Agent in the preparation, administration, delivery, execution and amendment of this Agreement and the performance of its duties under
23
this Agreement and to indemnify the Warrant Agent and save it harmless against any and all losses, liabilities and expenses, including judgments, damages, fines, penalties, claims, demands and costs (including reasonable out-of-pocket counsel fees and expenses), for anything done or omitted by the Warrant Agent arising out of or in connection with this Agreement except as a result of its fraud, recklessness, bad faith or willful misconduct. The costs and expenses incurred by the Warrant Agent in enforcing the right to indemnification shall be paid by the Company except to the extent that the Warrant Agent is not entitled to indemnification due to its fraud, recklessness, bad faith or willful misconduct. Notwithstanding the foregoing, the Company shall not be responsible for any settlement made without its written consent;
provided
, that nothing in this sentence shall limit the Company’s obligations contained in this paragraph other than pursuant to such a settlement. Notwithstanding anything contained herein to the contrary, except to the extent arising from fraud, recklessness, bad faith or willful misconduct of the Warrant Agent, the Warrant Agent’s aggregate liability to the Company during any term of this Agreement with respect to, arising from, or in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to the Warrant Agent as fees and charges, but not including reimbursable expenses.
The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense or liability unless the Company (if it is the party seeking such action) or one or more Holders (if they are the parties seeking such action) furnishes the Warrant Agent with security and indemnity satisfactory to the Warrant Agent for any costs or expenses that may be incurred. All rights of action under this Agreement or under any of the Warrants may be enforced by the Warrant Agent without the possession of any of the Warrants or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery or judgment shall be for the ratable benefit of the Holders, as their respective rights or interests may appear.
The Warrant Agent, and any member, stockholder, affiliate, director, officer or employee thereof, may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company is interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it was not the Warrant Agent under this Agreement, or a member, stockholder director, officer or employee of the Warrant Agent, as the case may be. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.
The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for anything that it may do or refrain from doing in connection with this Agreement except in connection with its own fraud, recklessness, bad faith or willful misconduct. Notwithstanding anything in this Agreement to the contrary, in no event will the Warrant Agent be liable for special, indirect, incidental, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Warrant Agent has been advised of the possibility of such loss or damage.
The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments
24
and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due and validly authorized execution hereof by the Warrant Agent) or in respect of the validity or execution of any Global Warrant Certificate (except its due and validly authorized countersignature thereof), nor shall the Warrant Agent by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of the Warrant Shares to be issued pursuant to this Agreement or any Warrant or as to whether the Warrant Shares will when issued be validly issued, fully paid and nonassessable or as to the Exercise Price or the Warrant Number.
Whenever in the performance of its duties under this Agreement the Warrant Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, the Warrant Agent is hereby authorized and directed that it may accept instructions with respect to the performance of its duties hereunder from an Appropriate Officer of the Company and to apply to such Appropriate Officer for advice or instructions in connection with its duties, and such instructions shall be full authorization and protection to the Warrant Agent and, absent fraud, recklessness, bad faith or willful misconduct, the Warrant Agent shall not be liable for any action taken, suffered to be taken, or omitted to be taken by it in accordance with instructions of any such Appropriate Officer or in reliance upon any statement signed by any one of such Appropriate Officers of the Company with respect to any fact or matter (unless other evidence in respect thereof is herein specifically prescribed) which may be deemed to be conclusively proved and established by such signed statement.
No provision of this Agreement shall require the Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
If the Warrant Agent shall receive any notice or demand (other than notice of or demand for exercise of Warrants) addressed to the Company by any Holder pursuant to the provisions of the Warrants, the Warrant Agent shall promptly forward such notice or demand to the Company.
The Warrant 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, accountants, agents or other experts, and the Warrant Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or the Holders resulting from any such act, default, neglect or misconduct, absent fraud, recklessness, bad faith or willful misconduct in the selection and continued employment thereof.
The Warrant Agent will not be under any duty or responsibility to ensure compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of the Warrants.
The Warrant Agent shall have no duties, responsibilities or obligations as the Warrant Agent except those which are expressly set forth herein, and in any modification or amendment hereof to which the Warrant Agent has consented in writing, and no duties, responsibilities or
25
obligations shall be implied or inferred. Without limiting the foregoing, unless otherwise expressly provided in this Agreement, the Warrant Agent shall not be subject to, nor be required to comply with, or determine if any Person has complied with, the Warrants, the Plan or any other agreement between or among the parties hereto, even though reference thereto may be made in this Agreement, or to comply with any notice, instruction, direction, request or other communication, paper or document other than as expressly set forth in this Agreement.
The Warrant Agent shall not incur any liability for not performing any act, duty, obligation or responsibility by reason of any occurrence beyond the control of the Warrant Agent (including without limitation any act or provision of any present or future law or regulation or governmental authority, any act of God, war, civil disorder or failure of any means of communication).
In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, or is for any reason unsure as to what action to take hereunder, the Warrant Agent shall notify the Company in writing as soon as practicable, and upon delivery of such notice may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to the Company or any Holder or other Person for refraining from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.
The provisions of this
Section 17
shall survive the termination of this Agreement, the exercise or expiration of the Warrants and the resignation or removal of the Warrant Agent.
No provision of this Agreement shall be construed to relieve the Warrant Agent from liability for its own fraud, recklessness, bad faith or its willful misconduct.
SECTION 18.
Change of Warrant Agent
. If the Warrant Agent resigns (such resignation to become effective not earlier than thirty (30) calendar days after the giving of written notice thereof to the Company and the Holders) or shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or make an assignment for the benefit of its creditors or consent to the appointment of a receiver of all or any substantial part of its property or affairs or shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay or meet its debts generally as they become due, or if an order of any court shall be entered approving any petition filed by or against the Warrant Agent under the provisions of bankruptcy laws or any similar legislation, or if a receiver, trustee or other similar official of it or of all or any substantial part of its property shall be appointed, or if any public officer shall take charge or control of it or of its property or affairs, for the purpose of rehabilitation, conservation, protection, relief, winding up or liquidation, or becomes incapable of acting as Warrant Agent or if the Board of Directors of the Company by resolution removes the Warrant Agent (such removal to become effective not earlier than thirty (30) calendar days after the filing of a certified copy of such resolution with the Warrant Agent and the giving of written notice of such removal to the Holders), the Company shall appoint a successor to the Warrant Agent. If the Company fails to make such appointment within a period of thirty (30) calendar days after such removal or after it has been so notified in writing of such resignation or incapacity by the Warrant Agent, then any Holder may apply to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Pending appointment of a successor to the Warrant Agent, either by the Company or by such a court, the duties of the
26
Warrant Agent shall be carried out by the Company. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be an entity, in good standing, incorporated under the laws of any state or of the United States of America. As soon as practicable after appointment of the successor Warrant Agent, the Company shall cause written notice of the change in the Warrant Agent to be given to each of the Holders at such Holder’s address appearing on the Warrant Register. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed. The former Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder and execute and deliver, at the expense of the Company, any further assurance, conveyance, act or deed necessary for the purpose. Failure to give any notice provided for in this Section 18 or any defect therein, shall not affect the legality or validity of the removal of the Warrant Agent or the appointment of a successor Warrant Agent, as the case may be.
SECTION 19.
Holder Not Deemed a Stockholder
. Nothing contained in this Agreement or in any of the Warrants shall be construed as conferring upon the Holders thereof the right to vote or to receive dividends or to participate in any transaction that would give rise to an adjustment of the Exercise Price under Section 12 or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company.
SECTION 20.
Notices to Company and Warrant Agent
. Any notice or demand authorized or permitted by this Warrant Agreement to be given or made by the Warrant Agent or by any Holder to or on the Company to be effective shall be in writing (including by facsimile), and shall be deemed to have been duly given or made when delivered by hand, or two (2) Business Days after being delivered to a recognized courier (whose stated terms of delivery are two (2) Business Days or less to the destination of such notice), or five (5) days after being deposited in the mail, first class and postage prepaid or, in the case of facsimile notice, when received, addressed as follows (until another address or facsimile number is filed in writing by the Company with the Warrant Agent):
Dynegy Inc.
601 Travis Street
Suite 1400
Houston, TX 77002
Attention: General Counsel
Fax: (713) 356-2185
Any notice or demand pursuant to this Warrant Agreement to be given by the Company or by any Holder to the Warrant Agent shall be sufficiently given if sent in the same manner as notices or demands are to be given or made to or on the Company (except for Warrant Exercise Notices, which shall be delivered in accordance with Section 7) to the Warrant Agent at the office maintained by the Warrant Agent (the “
Warrant Agent Office
”) as follows (until another address is filed in writing by the Warrant Agent with the Company, which other address shall become the address of the Warrant Agent Office for the purposes of this Agreement):
Computershare
480 Washington Blvd.
27
Jersey City, New Jersey, 07310
Attention: Corporate Actions Dept., 27
th
Floor
Fax: (201) 480-4665
SECTION 21.
Payment of Taxes and Charges
. No service charge shall be made to any Holder for any exercise, exchange or registration of transfer of Warrants, and the Company will pay all documentary stamp taxes attributable to the initial issuance of Warrant Shares upon the exercise of Warrants; provided, however, that neither the Company nor the Warrant Agent shall be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance of Warrants or any certificates for Warrant Shares in a name other than that of the registered holder of a Warrant surrendered upon the exercise of said Warrant, and the Company shall not be required to issue or deliver such Warrants or the certificates representing the Warrant Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Warrant Agent shall have no duty under to deliver such Warrants or the certificates representing such Warrant Shares unless and until it is satisfied that all such taxes and charges have been paid.
SECTION 22.
Exercise of Warrants and Beneficial Ownership Limitations
. By accepting a Warrant, each Holder shall be deemed to have agreed not to exercise any Warrants unless and until, if and to the extent such exercise would result in such Holder’s Beneficially Owned (aggregated with any Affiliates) Common Stock Equivalents reaching the Beneficial Ownership Limitation (as defined below), it and the Company have made all filings and registrations with, and obtained the permission, consent, approval, authorization, qualification or order (including the expiration of applicable waiting periods) from, any governmental and regulatory authorities applicable to the Company, as necessary or advisable for such exercise and the consequential acquisition by it of the Warrant Shares. For purposes of this Agreement, in determining the number of outstanding Common Stock Equivalents, a Holder may only rely on the number of outstanding Common Stock Equivalents as reflected in the most recent of the following: (A) the Company’s most recent periodic or annual report filed with the SEC, as the case may be; (B) a more recent public announcement by the Company; and (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Stock Equivalents outstanding. The “
Beneficial Ownership Limitation
” shall be such number of Common Stock Equivalents, or such percentage of Common Stock Equivalents outstanding at any time, the Beneficial Ownership of which shall require the prior permission, consent, approval, authorization, qualification or order (including the expiration of applicable waiting periods) of any governmental or regulatory authority applicable to the Company.
SECTION 23.
Supplements and Amendments
. This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and may not be amended, except in a writing signed by both of them. The Company and the Warrant Agent may from time to time supplement or amend this Agreement or the Warrants (a) without the approval of any Holders in order to cure any ambiguity, manifest error or other mistake in this Agreement or the Warrants, or to correct or supplement any provision contained herein or in the Warrants that may be defective or inconsistent with any other provision herein or in the Warrants, or to make any other provisions in regard to matters or questions arising hereunder that the Company and the Warrant Agent may deem necessary or desirable and that shall not adversely affect, alter
28
or change the interests of the Holders or (b) with the prior written consent of holders of the Warrants exercisable for a majority of the Warrant Shares then issuable upon exercise of the Warrants then outstanding;
provided
,
however
, that the prior written consent of holders of Warrants exercisable for a two-thirds of the Warrant Shares then issuable upon exercise of the Warrants then outstanding shall be required for any amendment of this Warrant Agreement pursuant to which the Exercise Price would be increased, the Warrant Number would be decreased or the Expiration Date would be advanced to an earlier date. Notwithstanding anything to the contrary herein, upon the delivery of a certificate from an Appropriate Officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this
Section 23
and,
provided
, that such supplement or amendment does not adversely affect the Warrant Agent’s rights or increase the Warrant Agent’s duties, liabilities or obligations hereunder, the Warrant Agent shall execute such supplement or amendment. Any amendment, modification or waiver effected pursuant to and in accordance with the provisions of this
Section 23
will be binding upon all Holders and upon each future Holder, the Company and the Warrant Agent. In the event of any amendment, modification or waiver, the Company will give prompt notice thereof to all Holders and, if appropriate, notation thereof will be made on all Global Warrant Certificates thereafter surrendered for registration of transfer or exchange.
SECTION 24.
Successors
. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
SECTION 25.
Termination
. This Warrant Agreement shall terminate at 5:00 p.m., New York City time, on the Expiration Date (or at 5:00 p.m., New York City Time, on the Business Day immediately following the Expiration Date, with respect to any Warrant exercised as set forth in the last sentence of
Section 7(b)
). Notwithstanding the foregoing, this Warrant Agreement will terminate on such earlier date on which all outstanding Warrants have been exercised. Termination of this Warrant Agreement shall not relieve the Company or the Warrant Agent of any of their obligations arising prior to the date of such termination or in connection with the settlement of any Warrant exercised prior to 5:00 p.m., New York City time, on the Expiration Date. The provisions of
Section 17
, this
Section 25
,
Section 26
and
Section 27
shall survive such termination and the resignation or removal of the Warrant Agent.
SECTION 26.
Governing Law Venue and Jurisdiction; Trial By Jury
. This Agreement and each Warrant issued hereunder shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such state. Each party hereto consents and submits to the jurisdiction of the courts of the State of New York and of the federal courts of the Southern District of New York in connection with any action or proceeding brought against it that arises out of or in connection with, that is based upon, or that relates to this Agreement or the transactions contemplated hereby. In connection with any such action or proceeding in any such court, each party hereto hereby waives personal service of any summons, complaint or other process and hereby agrees that service thereof may be made in accordance with the procedures for giving notice set forth in
Section 20
hereof. Each party hereto hereby waives any objection to jurisdiction or venue in any such court in any such action or proceeding and agrees not to assert any defense based on lack of jurisdiction or venue in any such court in any such action or proceeding. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any action, proceeding or
29
counterclaim as between the parties directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. Each of the parties hereto (i) certifies that no representative, agent or attorney of any other party hereto has represented, expressly or otherwise that such other party hereto would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this
Section 26
.
SECTION 27.
Benefits of this Agreement
. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Warrant Agent and the Holders any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders.
SECTION 28.
Counterparts
. This Agreement may be executed (including by means of facsimile or electronically transmitted portable document format (.pdf) signature pages) in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
SECTION 29.
Headings
. The headings of sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and in no way modify or restrict any of the terms or provisions hereof.
SECTION 30.
Severability
. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, and the invalid, illegal or unenforceable provision shall be interpreted and applied so as to produce as near as may be the economic result intended by the parties hereto. Upon determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
SECTION 31.
Meaning of Terms Used in Agreement
.
The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. Any references to any federal, state, local or foreign statute or law shall also refer to all rules and regulations promulgated thereunder, unless the context otherwise requires. Unless the context otherwise requires: (a) a term has the meaning assigned to it by this Agreement; (b) forms of the word “include” mean that the inclusion is not limited to the items listed; (c) “or” is disjunctive but not exclusive; (d) words in the singular include the plural, and in the plural include the singular; and (e) provisions apply to successive events and transactions; (f) “hereof”, “hereunder”, “herein” and “hereto” refer to the entire Agreement and not any section or subsection.
30
The following terms used in this Agreement shall have the meanings set forth below:
(i) “
$
” shall mean the currency of the United States.
(ii) “
Beneficial Ownership
” shall have the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “
Beneficially Own
” and “
Beneficially Owned
” have a corresponding meaning.
(iii) “
Business Day
” shall mean any day, except for Saturday and Sunday, or a day on which the New York Stock Exchange is required or authorized by law or executive order to close.
(iv) “
Market Price
” shall mean (w) if in reference to cash, the current cash value on the date of measurement in U.S. dollars, (x) if in reference to equity securities or securities included within Other Property, which are listed or admitted for trading on a national securities exchange, the average closing price of a share (or similar relevant unit) of such securities as reported on the principal national securities exchange on which the shares (or similar relevant units) of such securities are listed or admitted for trading or (z) in all other cases, the value as determined in good faith by the Board of Directors of the Company. In each such case, the average price shall be averaged over a period of twenty-one (21) consecutive trading days consisting of the trading day immediately preceding the day on which the “Market Price” is being determined and the twenty (20) consecutive trading days prior to such day.
(v) “
Person
” shall mean any individual, corporation, limited partnership, general partnership, limited liability partnership, limited liability company, joint stock company, joint venture, corporation, unincorporated organization, association, company, trust, group or other legal entity, or any governmental or political subdivision or any agency, department or instrumentality thereof.
[The next page is the signature page]
31
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be executed and delivered as of the day and year first above written.
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DYNEGY INC.
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By:
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/s/ Catherine B. Callaway
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Name: Catherine B. Callaway
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Title: EVP, General Counsel & Chief Compliance Officer
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Computershare Trust Company, N.A.
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By:
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/s/ Thomas Borbely
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Name: Thomas Borbely
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Title: Manager, Corporate Actions
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Computershare Trust Company, N.A.
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By:
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/s/ Thomas Borbely
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Name: Thomas Borbely
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Title: Manager, Corporate Actions
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EXHIBIT A-1
FORM OF WARRANT STATEMENT
DYNEGY INC.
DRS Warrant Distribution Statement
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CUSIP Number
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Account Number/Account Key
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12345678
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SAMPL—JAMEA0000
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Ticker Symbol
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Investor ID
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XXX
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123456789012
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Issuance Date
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Distribution
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mm/dd/2012
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WARRANTS
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NameXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Name/registration/address
Name/registration/address
Address
Address
Address
Address
Address
DYNEGY INC. Warrants Issued To You In Book-Entry
PLEASE RETAIN THIS STATEMENT FOR YOUR RECORDS
You have been issued warrants of DYNEGY INC. as a result of the joint Plan of Reorganization for Dynegy Holdings, LLC and DYNEGY INC. This statement reflects the DYNEGY INC. warrants registered in your name on DYNEGY INC.’s records, maintained by Computershare, DYNEGY INC.’s warrant agent and registrar. These warrants are maintained for you under the Direct Registration System, which means they are held for you in an electronic, book-entry account maintained by Computershare (see enclosed brochure, “What Individual Investors Should Know About Holding Securities
”
). Please retain this statement for your permanent record.
NO ACTION IS REQUIRED
if you choose to keep your warrants in book-entry form.
Questions? Contact Computershare
To access your account, use your Investor ID Number that is located in the box above on the top right hand corner of this statement. You can contact Computershare by one of the following ways:
By Internet
:
Visit
www.cpushareownerservices.com
for access to your account.
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By Phone
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By Mail
:
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Toll Free Number
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1-888-921-5563
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DYNEGY INC.
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Outside the U.S. (Collect)
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1-201-680-XXXX
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c/o Computershare
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Hearing Impaired
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1-800-231-5469
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P.O. Box 358035
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IVR system available 24 hours/7 days a week
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Pittsburgh, PA 15252-8035
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Representatives are available 9 a.m. to 7 p.m. Eastern Time weekdays
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REQUEST FOR TAXPAYER IDENTIFICATION AND CERTIFICATION
Our records indicate that we do not have a certified Taxpayer Identification Number (“
TIN
”) on file for your account. Without a certified TIN, we may be required by law to withhold (28%) from any future dividend payments and any sale transaction that you request. Logon to
www.cpushareownerservices.com
or call our IVR to certify your TIN, or contact us by phone to request a Substitute Form W-9 or W-8.
If you are exempt from backup withholding, remember to indicate that when completing the certification.
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over the
PHONE
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through the
INTERNET
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·
Dial the toll-free number shown above
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Go to
www.cpushareownerservices.com
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·
Say
“Certify my TIN” when prompted
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Select Equity Holdings to access the Investor ServiceDirect
TM
website
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Enter your Investor ID and PIN
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Select company name
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Speak your answers at the prompt
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·
Select
Certify Taxpayer ID
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SEE REVERSE SIDE FOR IMPORTANT INFORMATION
DYNEGY INC.
This statement is your record that warrants of
DYNEGY INC.
have been credited to your account on the books of
DYNEGY INC.
Please verify all information on the reverse side of this statement. This statement is neither a negotiable instrument nor a security, and delivery of this statement does not itself confer any rights on the recipient. Nevertheless, it should be kept with your important documents as a record of your ownership of these securities. These warrants are not represented by warrant certificates but are instead held in book-entry form.
You may transfer ownership of your book-entry warrants
at any time by submitting the appropriate warrant transfer documents to Computershare. Visit the Investor ServiceDirect
TM
website online at www.cpushareownerservices.com, or call 1-888-921-5563 to request transfer forms.
You may transfer your book-entry warrants to your broker
in one of two ways:
(1)
The fastest and easiest way - provide your broker with your Account Key at Computershare, your Taxpayer Identification Number (TIN) and your account registration information; and request that your broker initiate a DRS profile transaction, or
(2)
Obtain a “Broker-Dealer Authorization Form” by visiting
www.cpushareownerservices.com
, or by calling 1-888-921-5563, or
You may sell any or all of your book-entry warrants
under a program established by DYNEGY INC. by visiting
www.cpushareownerservices.com
, or phone toll free 1-888-921-5563 and say “
sell Warrants
” using our Speech Recognition technology, or simply check the appropriate “sell” box, sign and date the attached sales coupon and mail it in the envelope provided. Conducting a sale through this program entails enrollment in the program and is subject to the program’s terms and conditions. The full program terms and conditions are available at
www.cpushareownerservices.com
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2
WARRANT AGREEMENT
The Warrant Agreement, dated October 1, 2012 (the “
Warrant Agreement
”), between Dynegy Inc. (the “
Company
”) and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered, limited purpose trust company,, as Warrant Agent (collectively, the “
Warrant Agent
”) is incorporated by reference into and made a part of this statement and this statement is qualified in its entirety by reference to the Warrant Agreement. A copy of the Warrant Agreement may be inspected at the Warrant Agent’s office at 480 Washington Blvd., Jersey City, New Jersey, 07310 and is also available on the Company’s website at
www.dynegy.com
. All capitalized terms used but not defined herein are defined in the Warrant Agreement and shall have the meanings assigned to them therein.
Book-Entry Warrants may be exercised to purchase Warrant Shares from the Company from the Distribution Date through 5:00 p.m. New York City time on October 2, 2017 (the “
Expiration Date
”), at an initial exercise price of $40.00 (the “
Exercise Price
”) multiplied by the number of Warrant Shares set forth above (the “
Exercise Amount
”). The Exercise Price and the number of Warrant Shares purchasable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement. Subject to the terms and conditions set forth in the Warrant Agreement, each Holder of a Book-Entry Warrant may exercise such Book-Entry Warrant by: (1) providing written notice of such election (the “
Warrant Exercise Notice
”) to exercise the Book-Entry Warrant to the Warrant Agent in accordance with the instructions below, no later than 5:00 p.m., New York City time, on the Expiration Date, and (2) paying the applicable Exercise Amount, together with any applicable taxes and governmental charges, at the time set forth in the Warrant Agreement.
In lieu of paying the Exercise Amount as set forth in the preceding paragraph, subject to the provisions of the Warrant Agreement, each Book-Entry Warrant shall entitle the Holder thereof, at the election of such Holder, to exercise the Book-Entry Warrant by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon exercise of the Book-Entry Warrant which when multiplied by the Market Price of the Common Stock is equal to the aggregate Exercise Amount, and such withheld Warrant Shares shall no longer be issuable under the Book-Entry Warrant.
The Company shall not be required to issue fractions of Warrant Shares.
Definitions
For more definitions, please visit our glossary online located in the Help Center through Investor ServiceDirect
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Account Key:
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The 18 digit alpha numeric needed by your broker to effect a transaction on your behalf.
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DRS or Direct Registration System:
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A system established by the securities industry that allows investors to hold their warrants in electronic form on the books of the Issuer rather than in the form of a physical warrant certificate.
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CUSIP:
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A unique number used to identify DYNEGY INC. and the class of securities represented by this statement.
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Book-entry warrants:
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Warrants of securities that are recorded and maintained electronically by the plan administrator or transfer agent and evidenced by a statement rather than a physical certificate.
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Investor ID:
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The number used by Computershare to identify your account.
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(DETACH SALES COUPON HERE)
SELL MY WARRANTS
By signing and returning this form, I am authorizing the sale of DYNEGY INC. Warrants held in book-entry form in my name. Please mail me a check for the proceeds of the sale less applicable fees. The fees to be charged are included in the enclosed Warrant Sale Program sheet. THIS FORM MUST BE SIGNED BY THE REGISTERED HOLDER(S) EXACTLY AS THEIR NAME(S) APPEAR(S) ON THIS STATEMENT.
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FULL SALE:
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PARTIAL SALE:
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Taxpayer ID or Social
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o
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SELL ALL WARRANTS.
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o
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SELL WARRANTS.
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UNCERTIFIED
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SIGNATURE
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DATE
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SIGNATURE
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DATE
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JAMES A SAMPLE
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JANE SAMPLE
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123 MAIN STREET
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NEW YORK, NY 10009
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3836 123456789012 00100112345678SAMPL—JAMEA0000IRO01
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EXHIBIT A-2
FORM OF FACE OF GLOBAL WARRANT CERTIFICATE
VOID AFTER OCTOBER 2, 2017
This Global Warrant Certificate is held by The Depository Trust Company (the “
Depository
”) or its nominee in custody for the benefit of the beneficial owners hereof, and is not transferable to any Person under any circumstances except that (i) this Global Warrant Certificate may be exchanged in whole but not in part pursuant to
Section 6(a)
of the Warrant Agreement, (ii) this Global Warrant Certificate may be delivered to the Warrant Agent for cancellation pursuant to
Section 6(h)
of the Warrant Agreement and (iii) this Global Warrant Certificate may be transferred to a successor Depository with the prior written consent of the Company.
Unless this Global Warrant Certificate is presented by an authorized representative of the Depository to the Company or the Warrant Agent for registration of transfer, exchange or payment and any certificate issued is registered in the name of Cede & Co. or such other entity as is requested by an authorized representative of the Depository (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depository), any transfer, pledge or other use hereof for value or otherwise by or to any Person is wrongful because the registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Warrant Certificate shall be limited to transfers in whole, but not in part, to nominees of the Depository or to a successor thereof or such successor’s nominee, and transfers of portions of this Global Warrant Certificate shall be limited to transfers made in accordance with the restrictions set forth in
Section 6
of the Warrant Agreement.
No registration or transfer of the securities issuable pursuant to the Warrant will be recorded on the books of the Company until such provisions have been complied with.
5
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CUSIP No.
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No.
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WARRANT TO PURCHASE
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SHARES OF COMMON STOCK
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DYNEGY INC.
GLOBAL WARRANT TO PURCHASE COMMON STOCK
FORM OF FACE OF WARRANT CERTIFICATE
VOID AFTER OCTOBER 2, 2017
This Warrant Certificate (“
Warrant Certificate
”) certifies that or its registered assigns is the registered holder (the “
Holder
”) of a Warrant (the “
Warrant
”) of Dynegy Inc., a Delaware corporation (the “
Company
”), to purchase the number of shares (the “
Warrant Shares
”) of common stock, par value $0.01 per share (the “
Common Stock
”) of the Company set forth above. This warrant expires on October 2, 2017 (such date, the “
Expiration Date
”), and entitles the holder to purchase from the Company the number of fully paid and non-assessable Warrant Shares set forth above at the exercise price set forth in the last sentence of this paragraph (the “
Exercise Price
”) multiplied by the number of Warrant Shares set forth above (the “
Exercise Amount
”), payable to the Company either by certified or official bank or bank cashiers check payable to the order of the Company, or by wire transfer in immediately available funds of the Exercise Amount to an account of the Warrant Agent specified in writing by the Warrant Agent for such purpose, no later than 5:00 p.m. New York City time, on the following business day after a Warrant Exercise Notice is delivered to the Warrant Agent. The initial Exercise Price shall be $40.00.
In lieu of paying the Exercise Amount as set forth in the preceding paragraph, subject to the provisions of the Warrant Agreement (as defined on the reverse hereof), each Warrant shall entitle the Holder thereof, at the election of such Holder, to exercise the Warrant by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon exercise of the Warrant which when multiplied by the Market Price of the Common Stock is equal to the aggregate Exercise Price, and such withheld Warrant Shares shall no longer be issuable under the Warrant.
The Exercise Price and the number of Warrant Shares purchasable upon exercise of this Warrant are subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.
No Warrant may be exercised prior to the Distribution Date or after the Expiration Date (except as set forth in the Warrant Agreement). After the Expiration Date, the Warrants will become wholly void and of no value.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed by its duly authorized officer.
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Dated:
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DYNEGY INC.
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By:
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Name:
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Title:
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COMPUTERSHARE INC.
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COMPUTERSHARE TRUST COMPANY, N.A.
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as Warrant Agent
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By:
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Name:
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Title:
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FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE
DYNEGY INC.
The Warrant evidenced by this Warrant Certificate is a part of a duly authorized issue of Warrants to purchase a maximum of shares of Common Stock issued pursuant to that certain Warrant Agreement, dated as of the Effective Date of the Plan (the “
Warrant Agreement
”), duly executed and delivered by the Company and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered, limited purpose trust company, as warrant agent (collectively, the “
Warrant Agent
”). The Warrant Agreement hereby is incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the Holders of the Warrants. A copy of the Warrant Agreement may be inspected at the Warrant Agent office and is available upon written request addressed to the Company. All capitalized terms used in this Warrant Certificate but not defined that are defined in the Warrant Agreement shall have the meanings assigned to them therein.
Warrants may be exercised to purchase Warrant Shares from the Company from the Distribution Date through 5:00 p.m. New York City time on the Expiration Date, at the Exercise Price set forth on the face hereof, subject to adjustment as described in the Warrant Agreement. Subject to the terms and conditions set forth herein and in the Warrant Agreement, the Holder of the Warrant evidenced by this Warrant Certificate may exercise such Warrant by:
(vi)
providing written notice of such election (“
Warrant Exercise Notice
”) to exercise the Warrant to the Warrant Agent at the address set forth in the Warrant Agreement, “Re: Warrant Exercise”, by hand, no later than 5:00 p.m., New York City time, on the Expiration Date, which Warrant Exercise Notice shall substantially be in the form of an election to purchase Warrant Shares set forth herein, properly completed and executed by the Holder; and
(vii)
payment of the applicable Exercise Price multiplied by the number of shares of Common Stock in respect of which any Warrants are being exercised; provided, that to the extent a Warrant Exercise Notice is delivered through the book-entry facilities of the Depositary no later than 5:00 p.m., New York City time, on the Expiration Date, but the payment specified above is effected thereafter but no later than 5:00 p.m., New York City time, on the Business Day immediately after a Warrant Exercise Notice is delivered to the Warrant Agent (and no later than one Business Day after the Expiration Date), the Warrants shall nonetheless be deemed exercised prior to the Expiration Date for the purposes of this Warrant Agreement.
In lieu of paying the Exercise Amount as set forth in the preceding paragraph, subject to the provisions of the Warrant Agreement, each Warrant shall entitle the Holder thereof, at the election of such Holder, to exercise the Warrant by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon exercise of the Warrant which when multiplied by the Market Price of the Warrant Shares is equal to the aggregate Exercise Price, and such withheld Warrant Shares shall no longer be issuable under the Warrant. Notwithstanding the foregoing, no Cashless Exercise shall be permitted if, as the result of such adjustment provided for in Section 12 of the Warrant Agreement at the time of such Cashless Exercise, Warrant Shares include a cash component and the Company would be required to pay cash to a Holder upon exercise of Warrants.
In the event that upon any exercise of the Warrant evidenced hereby the number of Warrant Shares actually purchased shall be less than the total number of Warrant Shares purchasable upon exercise of the Warrant evidenced hereby, there shall be issued to the holder hereof, or such holder’s assignee, a new Warrant Certificate evidencing a Warrant to purchase the Warrant Shares not so purchased. No adjustment shall be made for any cash dividends on any Warrant Shares issuable upon exercise of this Warrant. After the Expiration Date, unexercised Warrants shall become wholly void and of no value.
The Company shall not be required to issue fractions of Warrant Shares or any certificates that evidence fractional Warrant Shares.
Warrant Certificates, when surrendered by book-entry delivery through the facilities of the Depository may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing a Warrant to purchase in the aggregate a like number of Warrant Shares.
This Warrant Certificate shall be transferred and assigned only in accordance with the terms set forth in this Warrant Certificate, including on the face hereof, and on the terms and subject to the conditions of the Warrant Agreement.
No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws. The securities represented by this instrument (including any securities issued upon exercise hereof) have not been registered under the securities act of 1933, as amended (the “
Securities Act
”) or the securities laws of any state and were issued pursuant to an exemption from the registration requirement of Section 5 of the Securities Act provided by section 1145 of Chapter 11 of Title 11 of the United States Code (the “
Bankruptcy Code
”), and to the extent that a Warrant holder is an “underwriter” as defined in section 1145(b)(1) of Chapter 11 of the Bankruptcy Code, such holder may not be able to sell or transfer any securities represented by this instrument (including any securities issued upon exercise hereof) in the absence of an effective registration statement relating thereto under the Securities Act and in accordance with applicable state securities laws or pursuant to an exemption from registration under such act or such laws.
The Company and Warrant Agent may deem and treat the registered holder hereof as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
[Balance of page intentionally remains blank]
EXHIBIT B-1
FORM OF ELECTION (“FORM OF ELECTION”) TO EXERCISE WARRANT FOR WARRANT HOLDERS HOLDING BOOK-ENTRY WARRANTS (TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant statement, to purchase newly issued shares of Common Stock of Dynegy Inc. (the “
Company
”) at the Exercise Price of $ per share.
The undersigned represents, warrants and promises that it has the full power and authority to exercise and deliver the Warrants exercised hereby. The undersigned represents, warrants and promises that it has delivered as payment for such shares $ (the “
Exercise Amount
”) by certified or official bank or bank cashier’s check payable to the order of “Dynegy Inc.”, together with this Form of Election or through a Cashless Exercise (as defined below).
o
Please check if the undersigned, in lieu of paying the Exercise Amount as set forth in the preceding paragraph, elects to exercise the Warrant by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon exercise of the Warrant which when multiplied by the Market Price of the Company’s Common Stock is equal to the aggregate Exercise Price, and such withheld Warrant Shares shall no longer be issuable under the Warrant (a “
Cashless Exercise
”).
Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in that certain Warrant Agreement, dated as of October 1, 2012, duly executed and delivered by the Company and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered, limited purpose trust company, as warrant agent.
The undersigned requests that a statement representing the Warrant Shares be delivered as follows:
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Name
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Address
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Delivery Address (if different)
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If such number of Warrant Shares is less than the aggregate number of Warrant Shares purchasable hereunder, the undersigned requests that a new Book-Entry Warrant representing the balance of such Warrants shall be registered, with the appropriate Warrant statement delivered as follows:
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Name
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Address
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Delivery Address (if different)
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Social Security or Other Taxpayer
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Signature
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Identification Number of Holder
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Note: The above signature must correspond with the name as written upon the Warrant statement in every particular, without alteration or enlargement or any change whatsoever. If the statement representing the Warrant Shares or any Warrant statement representing Warrants not exercised is to be registered in a name other than that in which this Warrant statement is registered, the signature of the holder hereof must be guaranteed.
Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program.
EXHIBIT B-2
FORM OF ELECTION TO EXERCISE WARRANT FOR
WARRANT HOLDERS HOLDING WARRANTS THROUGH
THE DEPOSITORY TRUST COMPANY
TO BE COMPLETED BY DIRECT PARTICIPANT
IN THE DEPOSITORY TRUST COMPANY
DYNEGY INC.
Warrants to Purchase Shares of Common Stock
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right, represented by Warrants held for its benefit through the book-entry facilities of The Depository Trust Company (the “Depository”), to purchase newly issued shares of Common Stock of Dynegy Inc. (the “Company”) at the Exercise Price of $ per share.
The undersigned represents, warrants and promises that it has the full power and authority to exercise and deliver the Warrants exercised hereby. The undersigned represents, warrants and promises that it has delivered or will deliver in payment for such shares $ by certified or official bank or bank cashier’s check payable to the order of the Company, or by wire transfer in immediately available funds of the aggregate Exercise Price to an account of the Warrant Agent specified in writing by the Warrant Agent for such purpose or through a Cashless Exercise (as defined below), no later than 5:00 p.m., New York City time, on the date the Warrant Exercise Notice is delivered to the Warrant Agent.
o
Please check if the undersigned, in lieu of paying the Exercise Price as set forth in the preceding paragraph, elects to exercise the Warrant by authorizing the Company to withhold from issuance a number of shares issuable upon exercise of the Warrant which when multiplied by the Market Price of the Common Stock is equal to the aggregate Exercise Price, and such withheld shares shall no longer be issuable under the Warrant (“Cashless Exercise”).
The undersigned requests that the shares of Common Stock purchased hereby be in registered form in the authorized denominations, registered in such names and delivered, all as specified in accordance with the instructions set forth below, provided that if the shares of common stock are evidenced by global securities, the shares of common stock shall be registered in the name of the Depository or its nominee.
Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in that certain Warrant Agreement, dated as of October 1, 2012, duly executed and delivered by the Company and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered, limited purpose trust company, as warrant agent.
NOTE: THIS EXERCISE NOTICE MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. THE WARRANT AGENT SHALL NOTIFY YOU (THROUGH THE CLEARING SYSTEM) OF (1) THE WARRANT AGENT’S ACCOUNT AT THE DEPOSITORY TO WHICH YOU MUST DELIVER YOUR WARRANTS ON THE EXERCISE DATE AND (2) THE ADDRESS AND PHONE NUMBER WHERE YOU CAN CONTACT THE WARRANT AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED.
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NAME OF DIRECT PARTICIPANT IN THE DEPOSITORY:
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(PLEASE PRINT)
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ADDRESS:
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CONTACT NAME:
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ADDRESS:
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TELEPHONE (INCLUDING INTERNATIONAL CODE):
FAX (INCLUDING INTERNATIONAL CODE):
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE):
ACCOUNT FROM WHICH WARRANTS ARE BEING DELIVERED:
DEPOSITORY ACCOUNT NO.”
WARRANT EXERCISE NOTICES WILL ONLY BE VALID IF DELIVERED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN THIS NOTIFICATION (OR AS OTHERWISE DIRECTED), MARKED TO THE ATTENTION OF “WARRANT EXERCISE”. WARRANT HOLDER DELIVERING WARRANTS, IF OTHER THAN THE DIRECT DTC PARTICIPANT DELIVERING THIS WARRANT EXERCISE NOTICE:
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NAME:
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(PLEASE PRINT)
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CONTACT NAME:
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TELEPHONE (INCLUDING INTERNATIONAL CODE):
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FAX (INCLUDING INTERNATIONAL CODE):
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SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE):
ACCOUNT TO WHICH THE SHARES OF COMMON STOCK ARE TO BE CREDITED:
FILL IN FOR DELIVERY OF THE COMMON STOCK, IF OTHER THAN TO THE PERSON DELIVERING THIS WARRANT EXERCISE NOTICE:
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NAME:
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(PLEASE PRINT)
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ADDRESS:
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CONTACT NAME:
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TELEPHONE (INCLUDING INTERNATIONAL CODE):
FAX (INCLUDING INTERNATIONAL CODE):
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE):
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NUMBER OF WARRANTS BEING EXERCISED
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(ONLY ONE EXERCISE PER WARRANT EXERCISE NOTICE)
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Signature:
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Name:
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Capacity in which Signing:
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Signature Guaranteed BY:
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Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program.
EXHIBIT C
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER
DESIRES TO TRANSFER A WARRANT)
FOR VALUE RECEIVED, the undersigned registered holder hereby sells, assigns and transfers unto
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Name of Assignee
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Address of Assignee
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Warrants to purchase shares of Common Stock of Dynegy Inc. held by the undersigned, together with all right, title and interest therein, and does irrevocably constitute and appoint attorney, to transfer such Warrants on the books of the Warrant Agent, with full power of substitution.
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Dated
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Signature
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Social Security or Other Taxpayer Identification Number of Assignee
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SIGNATURE GUARANTEED BY:
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Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program.
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EXHIBIT D
Specific terms of this Exhibit have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].
COMPUTERSHARE TRUST COMPANY, N.A.
FEE SCHEDULE TO SERVE AS
WARRANT AGENT FOR
DYNEGY INC.
A.
FEES FOR SERVICES *
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$
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[***]
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Acceptance Fee of new warrant class
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(includes First Year Annual Maintenance Fee)
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$
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[***]
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Per Warrant Exercise or Transfer (any number of Warrants), if applicable
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$
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[***]
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Exercises requiring additional handling, each
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$
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[***]
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Requisitioning of funds, each
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$
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[***]
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Per Wire Transfer
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$
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[***]
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Annual Maintenance Fee per class
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$
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[***]
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Expiration
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*Excludes out-of-pocket expenses as described in Section C, “Items Not Covered”
B.
SERVICES COVERED
·
Designating an operational team to establish Warrant Agent
procedures and duties, including document review, execution of legal agreement, operations management, and on-going updates and reporting
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Establish Warrant issue under Dynegy Inc. on Computershare’s Transfer Agent record keeping system
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Establish and coordinate Warrant exercise and transfer procedures with the Depositary Trust Company
·
Process Warrant exercise and transfer requests by issuing certificates or, if applicable, through the Direct Registration System
·
Tracking and reporting the number of warrants issued, transferred, outstanding and exercised, as required
·
Processing warrants received and converted
·
Deposit Warrant conversion checks and incoming wire transfers daily and forward all participant funds to Dynegy Inc.
·
Providing receipt summation of checks and wire transfers received
·
Issuing and mailing stock certificates, DRS share statements and warrants, as applicable
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Affixing legends to appropriate stock certificates, where applicable
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Replace lost, stolen or destroyed securities in accordance with UCC guidelines and Computershare policy (subject to shareholder-paid fee and bond premium), if required
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Process and post address changes plus mail confirmations if required
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Obtain W-9 and W8-BEN certifications
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Comply with SEC mandated annual lost shareholder search
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Perform OFAC (Office of Foreign Asset Control) and Patriot Act reporting
·
Produce daily transfer reports and post them for online viewing
C.
ITEMS NOT COVERED
·
Items not specified in the “Services Covered” section set forth in this Agreement, including any services associated with new duties, legislation or regulatory fiat which become effective after the date of this Agreement (these will be provided on an appraisal basis)
·
All out-of-pocket expenses such as telephone line charges, overprinting, certificates, checks, postage, stationery, wire transfers, and excess material disposal (these will be billed as incurred)
·
Reasonable legal review fees if referred to outside counsel
D.
ASSUMPTIONS
·
Fee schedule based on up to 1,000 warrant holders and information known at this time about the transaction.
·
Significant changes made in the terms or requirements of this transaction could require modifications to this Fee schedule
E.
PAYMENT FOR SERVICES
The Project Fee will be rendered and payable upon execution of the Warrant Agent agreement.
Exhibit 10.3
DYNEGY INC.
2012 LONG TERM INCENTIVE PLAN
I.
PURPOSE
The purpose of the
DYNEGY INC. 2012 LONG TERM INCENTIVE PLAN
(the “Plan”) is to provide a means through which
DYNEGY INC.
, a Delaware corporation (the “Company”), and its Affiliates may attract able persons to serve as Directors or Consultants or to enter the employ of the Company and its Affiliates and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the Company and its Affiliates are of importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the Company and its Affiliates. A further purpose of the Plan is to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for granting Incentive Stock Options, Options that do not constitute Incentive Stock Options, Restricted Stock Awards, Performance Awards, Stock Appreciation Rights, Stock Units, and Phantom Stock Awards, or any combination of the foregoing, as is best suited to the circumstances of the particular Employee, Consultant or Director as provided herein.
II.
DEFINITIONS
The following definitions shall be applicable throughout the Plan unless specifically modified by any paragraph:
(a)
“
Affiliate
”
means any corporation, partnership, limited liability company or partnership, association, trust or other organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company; provided, that, with respect to the award of any “stock right” that is not intended to provide for a deferral of compensation within the meaning of Code Section 409A, the term “Affiliate” as used in Section II(i) and (o) shall be limited to those entities that qualify as a “service recipient” within the meaning of Code Section 409A, and in applying Code Section 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Code Section 414(b) and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), the language “at least 50 percent” is used instead of “at least 80 percent”; provided, further, that, in the case of an Incentive Stock Option, the term “Affiliate” as used in Section II (o) and Section VII(c) shall mean a “parent corporation” or a “subsidiary corporation” within the meaning of Code Section 424. The term “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”), as applied to any person (whether natural or not), means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting or other securities, by contract or otherwise.
(b)
“
Award
”
means, individually or collectively, any Option, Restricted Stock Award, Performance Award, Stock Appreciation Right, Stock Unit, or Phantom Stock Award.
(c)
“
Award Agreement
”
means a written agreement between the Company and a Participant with respect to a grant of an Award. For purposes of this Plan, the forms of Award Agreement shall include the following:
(1)
Performance Award Agreements;
(2)
Phantom Stock Award Agreements;
(3)
Restricted Stock Award Agreements;
(4)
Stock Appreciation Right Agreements;
(5)
Option Agreements; and
(6)
Stock Unit Agreements.
(d)
“
Board
”
means the Board of Directors of the Company.
(e)
“
Cause
” means, in the case of a particular Award, unless the applicable Award Agreement states otherwise, (i) “cause” to terminate the Participant’s employment or service, as defined in any employment, consulting, change in control, severance, or other agreement between the Participant and the Company or an Affiliate in effect at the time of such termination, or in any of the following severance plans, as applicable, to the extent that the Participant is then a participant in such plan and the terms of such plan would govern the Participant’s rights to severance benefits, if any, in connection with such termination: the Dynegy Inc. Executive Change in Control Severance Pay Plan, the Dynegy Inc. Executive Severance Pay Plan, the Dynegy Inc. Change in Control Severance Pay Plan, and the Dynegy Inc. Severance Pay Plan, in each case as amended from time to time, or (ii) in the absence of any such employment, consulting, change in control, severance, or other agreement, or if none of such severance plans applies to such Participant (or the absence of any definition of “cause” or term of similar meaning therein), (A) the Participant’s failure to follow the lawful instructions of the Board or the Participant’s direct superiors, in each case other than as a result of incapacity due to physical or mental illness or injury, (B) the Participant’s engaging in conduct (whether by act or omission) harmful (whether financially, reputationally, or otherwise) to the Company or an Affiliate, (C) the Participant’s having committed or having been convicted of, or having plead guilty or no contest to, a felony, a crime of moral turpitude or any crime involving as a material element fraud or dishonesty (or the procedural equivalents of the foregoing), (D) the willful misconduct or neglect of the Participant in the performance of the Participant’s duties for the Company or an Affiliate, (E) the Participant’s violation of any material written policy of the Company or any of its Affiliates or breach of any agreement with the Company or an Affiliate, (F) the Participant’s fraud or misappropriation, embezzlement, or misuse of funds or property belonging to the Company, (G) the Participant’s act of personal dishonesty, which involves personal profit in connection with the Participant’s employment or service with the Company or an Affiliate, or (H) the breach by the Participant of any fiduciary duty owed to the Company or an Affiliate.
(f)
“
Code
”
means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations under such section.
(g)
“
Committee
”
means a committee of the Board that is selected by the Board as provided in Section IV(a).
2
(h)
“
Common Stock
”
means the common stock, $0.01 par value per share, of the Company, or any security into which such common stock may be changed by reason of any transaction or event of the type described in Article XIII.
(i)
“
Company
”
means Dynegy Inc., a Delaware corporation.
(j)
“
Consultant
”
means any person who is not an Employee or a Director and who is providing bona fide advisory or consulting services (other than services relating to the raising of capital) to the Company or any Affiliate.
(k)
“
Corporate Change
”
means the occurrence of any of the following events:
(1)
a merger of the Company with another entity, a consolidation involving the Company, or the sale of all or substantially all of the assets or equity interests of the Company to another entity if, in any such case, (i) the holders of equity securities of the Company immediately prior to such event do not beneficially own immediately after such event equity securities of the resulting entity entitled to at least a majority of the votes then eligible to be cast in the election of directors (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of the Company immediately prior to such event or (ii) the persons who were members of the Board immediately prior to such event (or persons designated by such persons) do not constitute at least a majority of the board of directors of the resulting entity immediately after such event;
(2)
a circumstance where any person or entity, including a “group” as contemplated by Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control (including, without limitation, power to vote) of at least a majority of either (A) the then-outstanding shares of Common Stock (the “Outstanding Common Stock”) of, or (B) the combined voting power of the then-outstanding voting securities (the “Outstanding Voting Securities”) of, (i) if the Company has not engaged in a merger or consolidation, the Company, or (ii) if the Company has engaged in a merger or consolidation, the resulting entity; provided, however, that the following acquisitions or gains of ownership or control shall not constitute a Corporate Change: (I) any acquisition directly from the Company, (II) any acquisition by the Company or a subsidiary thereof, or (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; or
(3)
as a result of a contested election of directors, the persons who were members of the Board immediately before such election (or persons designated by such persons) shall cease to constitute a majority of the Board immediately after such election.
Notwithstanding anything herein to the contrary, the following events shall not constitute a Corporate Change: (i) any event that would otherwise constitute a Corporate Change but that occurs any time prior to the Effective Date, and (ii) a reorganization under either Chapter 7 or Chapter 11 of Title 11 of the United States Code, regardless of whether such reorganization occurs before or after the Effective Date.
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For purposes of this definition, (i) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all of the subject assets or equity interests shall mean the surviving entity (or acquiring entity in the case of an asset or equity interest sale), unless the surviving entity (or acquiring entity in the case of an asset or equity interest sale) is a subsidiary of another entity and the holders of common stock of the Company receive capital stock (or its equivalent for a non-corporate entity) of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (ii) subsequent to the consummation of a merger or consolidation that does not constitute a Corporate Change, the term “Company” shall refer to the resulting entity and the term “Board” shall refer to the board of directors (or comparable governing body) of the resulting entity.
(l)
“Covered Employee”
means an Employee who is, or, as determined by the Committee may become, a “covered employee” within the meaning of Code Section 162(m).
(m)
“
Director
”
means an individual who is a member of the Board.
(n)
“Disability”
has the meaning provided in the Dynegy Inc. Long Term Disability Plan.
(o)
“
Effective Date
”
shall have the same meaning as provided in the Company’s Joint Plan of Reorganization under Chapter 11 of Title 11 of the United States Code, dated as of July 12, 2012, as the same may be amended or modified.
(p)
“
Employee
”
means any person in an employment relationship with the Company or any Affiliate.
(q)
“Fair Market Value
”
means, as of any specified date, the closing sales price of the Common Stock reported on the stock exchange composite tape on that date (or such other reporting service approved by the Committee), or, if no prices are reported on that date, on the last preceding date on which such prices of the Common Stock are so reported. In the event that Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its fair market value shall be made by the Committee in such manner as it deems appropriate, in accordance with Code Section 409A.
(r)
“Forfeiture Restriction”
has the meaning provided in Section VIII(a) of the Plan.
(s)
“Full Value Award”
means all Awards other than Stock Appreciation Rights and Options that have an exercise price equal to or greater than the Fair Market Value on the date of grant.
(t)
“
Incentive Stock Option
”
means an incentive stock option within the meaning of Code Section 422.
(u)
“
1934 Act
”
means the Securities Exchange Act of 1934, as amended.
(v)
“
Option
”
means an Award granted under Article VII of the Plan and includes both Incentive Stock Options to purchase Common Stock and Options that do not constitute Incentive Stock Options to purchase Common Stock.
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(w)
“
Participant
”
means an Employee, Consultant or Director who has been granted an Award.
(x)
“
Performance
Award
”
means an Award granted under Article XII of the Plan.
(y)
“Performance Criter
ia”
means the criterion or criteria the Committee selects for
purposes of establishing (i) the Performance Goal(s) for a Performance Award that
is
a Qualified Performance-Based Award, (ii) the Performance Goal(s) for a Performance Award that is
not
a Qualified Performance-Based Award, or (iii) a Forfeiture Restriction for a Restricted Stock Award, Stock Unit, or Phantom Stock Award that is
not
a Qualified Performance-Based Award. The Performance Criteria are:
(1) the price of a share of Common Stock,
(2) the Company’s earnings per share derived from all or any segment or portion of the Company designated by the Committee,
(3) the return on capital employed by the Company or any segment or portion of the Company designated by the Committee,
(4) the revenues of the Company or any segment or portion of the Company designated by the Committee,
(5) the net income (before or after taxes) of the Company or any segment or portion of the Company designated by the Committee,
(6) the cash flow return on investment of the Company or any segment or portion of the Company designated by the Committee,
(7) the earnings before or after interest, taxes, depreciation, and/or amortization of the Company or any segment or portion of the Company designated by the Committee (including any derivations or adjusted version of this criteria as determined by the Committee) or any other earnings metric of the Company,
(8) the return on stockholder’s equity achieved by the Company,
(9) the total stockholder’s return achieved by the Company,
(10) the operating cash flow, free cash flow or any other cash flow metric of the Company or a segment or portion of the Company designated by the Committee,
(11) the Company’s liquidity or the liquidity of any segment or portion of the Company designated by the Committee,
(12) the operating, capital or general and administrative (G&A) expenses
5
of the Company or any segment or portion of the Company designated by the Committee,
(13) the addition of economic value to or by the Company or any segment or portion of the Company designated by the Committee,
(14) the safety, environmental, health or operational performance, based on an objective, measurable metric, of the Company or any segment or portion of the Company designated by the Committee,
(15) other than with respect to a Performance Award that
is
a Qualified Performance-Based Award, any other performance metric selected by the Committee in its sole discretion, including a metric relating to the Company or any segment or portion of the Company designated by the Committee (including, but not limited to, any business unit or functional area of the Company), or
(16) a combination of two or more of any of the foregoing.
The Performance Criteria may be subject to adjustment by the Committee for extraordinary items or events, and may be absolute, relative to one or more other companies, or relative to one or more indexes, and may be contingent upon future performance of the Company or any Affiliate, division, or department thereof.
(z)
“Performance Goals”
means the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria (as described above). Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance, the performance of a segment or portion of the Company or the performance of an individual. For any Award that incorporates Performance Goals, the Committee shall establish such Performance Goals for each Performance Period prior to, or as soon as practicable after, the commencement of such Performance Period. For any Award that is designated as a Qualified Performance-Based Award, the Committee may disregard or offset the effect of any “Extraordinary Items” in determining the attainment of Performance Goals. For this purpose, “Extraordinary Items” means extraordinary, unusual and/or non-recurring items, including but not limited to, (i) restructuring or restructuring-related charges, (ii) gains or losses on the disposition of a business or major asset, (iii) changes in business conditions, regulatory, tax or accounting regulations or laws, (iv) resolution and/or settlement of litigation and other legal proceedings and (v) the effect of a merger or acquisition.
(aa)
“Performance Period”
means the designated period during which the Performance Goals must be satisfied with respect to the Award (or the earning of the Award) to which the Performance Goals relate.
(bb)
“
Phantom Stock Award
”
means an Award granted under Article IX of the Plan.
(cc)
“
Plan
”
means the Dynegy Inc. 2012 Long Term Incentive Plan, as amended from time to time.
6
(dd)
“Qualified Performance-Based Award”
means a Performance Award that is intended to qualify as “qualified performance-based compensation” within the meaning of Code Section 162(m) and is designated as a Qualified Performance-Based Award pursuant to Article XII of the Plan.
(ee)
“
Restricted Stock Award
”
means an Award granted under Article VIII of the Plan.
(ff)
“
Rule 16b-3
”
means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a similar function.
(gg)
“
Stock Appreciation Right
”
shall have the meaning assigned to such term in Article X of the Plan.
(hh)
“
Stock Unit
”
shall have the meaning assigned to such term in Article XI of the Plan.
III.
EFFECTIVE DATE, STOCKHOLDER APPROVAL AND DURATION OF THE PLAN
The Plan shall become effective on the Effective Date. Confirmation of the Company’s Joint Plan of Reorganization shall constitute all necessary approval by the stockholders of the Company of the Plan to the extent permitted under applicable law. No further Awards may be granted under the Plan after ten (10) years from the effective date of the Plan. Subject to Article XIV, the Plan shall remain in effect until all Options granted under the Plan have been exercised or expired; all Restricted Stock Awards, Stock Appreciation Rights, and Stock Units granted under the Plan have vested, been forfeited, or expired; and all Performance Awards and Phantom Stock Awards have been satisfied or expired.
IV.
ADMINISTRATION
(a)
Composition of Committee
. The Plan shall be administered by a committee of, and appointed by, the Board that shall comprise two (2) or more Directors who qualify as “outside directors” as defined in Code Section 162(m) and applicable interpretive authority thereunder and as “non-employee directors” as defined in Rule 16b-3, and who otherwise qualify as independent under applicable listing exchange requirements, as may apply to the Company from time to time.
(b)
Powers
. Subject to the express provisions of the Plan, the Committee shall have authority, in its discretion, to determine which Employees, Consultants or Directors shall receive an Award, the time or times when such Award shall be made, the type of Award that shall be made, and the number of shares subject to or the value of each Award. In making such determinations, the Committee shall take into account the nature of the services rendered by the respective Employees, Consultants or Directors, their present and potential contribution to the Company’s success and such other factors as the Committee in its sole discretion shall deem relevant. The Committee shall also have authority, in its discretion, to (1) construe the Plan and the respective agreements executed hereunder, (2) prescribe rules and regulations relating to the
7
Plan, (3) determine the terms, restrictions and provisions of the agreement relating to each Award, including, without limitation, the exercise price, medium of payment and vesting provisions, as well as restrictions and provisions as shall be required in the judgment of the Committee to cause designated Options to qualify as Incentive Stock Options, (4) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, and (5) make all other determinations and take all other actions that the Committee deems necessary or desirable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent it shall deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Article IV shall be conclusive.
V.
SHARES SUBJECT TO THE PLAN; AWARD LIMITS;
GRANT OF AWARDS
(a)
Shares Subject to the Plan
. Subject to adjustment in the same manner as provided in Article XIII with respect to shares of Common Stock subject to Awards then outstanding, the aggregate number of shares of Common Stock that shall be available for the grant of Awards under the Plan shall not exceed 6,084,576 shares; provided, that no more than 6,084,576 shares of Common Stock may be granted as Incentive Stock Options.
Shares of Common Stock shall be deemed to have been issued under the Plan only to the extent actually issued and delivered pursuant to an Award or to the extent an Award denominated in shares of Common Stock is settled in cash. Further, (1) shares of Common Stock previously granted or issued in connection with an Award that are subsequently forfeited back to the Company and/or that are canceled on account of termination, expiration or lapse of an Award without payment to a Participant shall be made available for issuance as Awards under the Plan, and (2) any shares of Common Stock withheld or tendered to pay the exercise price of an Option or other purchase price of an Award or withholding tax obligations with respect to an Award or shares of Common Stock repurchased on the open market with the proceeds of the Option exercise price shall not be made available for issuance as Awards under the Plan.
(b)
Award Limits
. Notwithstanding any provision in the Plan to the contrary:
(1)
The maximum number of shares of Common Stock that may be subject to Options, Restricted Stock Awards, Stock Units, Stock Appreciation Rights, Phantom Stock Awards and Performance Awards denominated in shares of Common Stock granted to any one individual during any calendar year may not exceed 1,216,915 shares or the equivalent of 1,216,915 shares of Common Stock (subject to adjustment in the same manner as provided in Article XIII with respect to shares of Common Stock subject to Options then outstanding), and
(2)
The maximum amount of compensation that may be paid under all Performance Awards denominated in cash (including the Fair Market Value of any shares of Common Stock paid in satisfaction of such Performance Awards) granted to any one individual during any calendar year may not exceed $10,000,000, and any payment due with respect to a Performance Award shall be paid no later than ten (10) years after the date of grant of such Performance Award.
8
The limitations set forth in clauses (1) and (2) above shall be applied in a manner that will permit compensation generated under the Plan to constitute “performance-based” compensation for purposes of Code Section 162(m), including, without limitation, counting against such maximum number of shares, to the extent required under Code Section 162(m) and applicable interpretive authority thereunder, any shares subject to Awards that are canceled or adjusted as provided in Section XIII(b) below.
(c)
Grant of Awards
. The Committee may from time to time grant Awards to one or more Employees, Consultants or Directors determined by it to be eligible for participation in the Plan in accordance with the terms of the Plan.
(d)
Stock Offered
. Subject to the limitations set forth in Sections V(a) and (b), the stock to be offered pursuant to the grant of an Award may be authorized but unissued Common Stock or Common Stock previously issued and outstanding and reacquired by the Company. Any of such shares which remain unissued and which are not subject to outstanding Awards at the termination of the Plan shall cease to be subject to the Plan but, until termination of the Plan, the Company shall at all times make available a sufficient number of shares to meet the requirements of the Plan.
VI.
ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are Employees, Consultants or Directors. An Award may be granted on more than one occasion to the same person, and, subject to the limitations set forth in the Plan, such Award may include an Incentive Stock Option, an Option that is not an Incentive Stock Option, a Restricted Stock Award, a Performance Award, a Phantom Stock Award, a Stock Appreciation Right, a Stock Unit, or any combination thereof.
VII.
STOCK OPTIONS
(a)
Option Period
. The term of each Option shall be as specified by the Committee at the date of grant, but in no event shall an Option be exercisable after the expiration of ten (10) years from the date of grant.
(b)
Limitations on Exercise of Option
. An Option shall be exercisable in whole or in such installments and at such times as determined by the Committee.
(c)
Special Limitations on Incentive Stock Options
. An Incentive Stock Option may be granted only to an individual who is employed by the Company or any Affiliate at the time the Option is granted. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Stock Option is granted) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be treated as Options which do not constitute Incentive Stock Options. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Participant’s Incentive Stock Options will not constitute Incentive Stock Options because of such limitation and shall notify the Participant of such determination as
9
soon as practicable after such determination. No Incentive Stock Option shall be granted to an individual if, at the time the Option is granted, such individual owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of Code Section 422(b)(6), unless (i) at the time such Option is granted the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. An Incentive Stock Option shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable during the Participant’s lifetime only by such Participant or the Participant’s guardian or legal representative.
(d)
Option Agreement
. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve, including, without limitation, provisions to qualify an Incentive Stock Option under Code Section 422. Each Option Agreement shall specify the effect of termination of (i) employment, (ii) the consulting or advisory relationship, or (iii) membership on the Board, as applicable, on the exercisability of the Option. An Option Agreement may provide for the payment of the option price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a Fair Market Value equal to such option price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option by establishing procedures satisfactory to the Committee with respect thereto. Further, an Option Agreement may provide for the surrender of the right to purchase shares under the Option in return for a payment under a Stock Appreciation Right, in accordance with Article XI of the Plan. The terms and conditions of the respective Award Agreements need not be identical. The Committee may, in its sole discretion, amend an outstanding Option Agreement from time to time in any manner that is not inconsistent with the provisions of the Plan, including, without limitation, Article XIV. Such amendments may include, without limitation, amendments that accelerate the time at which the Option, or a portion thereof, may be exercisable.
(e)
Option Price and Payment
. The price at which a share of Common Stock may be purchased upon exercise of an Option shall be determined by the Committee but, subject to adjustment as provided in Article XIII, such purchase price shall not be less than the Fair Market Value of a share of Common Stock on the date such Option is granted. The Option or portion thereof may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee. The purchase price of the Option or portion thereof shall be paid in full in the manner prescribed by the Committee. Separate stock certificates shall be issued by the Company for those shares acquired pursuant to the exercise of an Incentive Stock Option and for those shares acquired pursuant to the exercise of any Option that does not constitute an Incentive Stock Option.
(f)
Restrictions on Repricing of Options
. Except as provided in Articles XIII and XV(g), the terms of outstanding Options may not be amended to reduce the exercise price of outstanding Options or cancel, exchange, substitute, buyout or surrender outstanding Options in exchange for cash, other Awards or Options with an exercise price that is less than the exercise price of the original Options without stockholder approval to the extent that stockholder approval
10
is required by law or applicable exchange requirement, or, except as the Committee may otherwise deem advisable, to the extent necessary to avoid adverse accounting treatment
.
(g)
Stockholder Rights and Privileges
. The Participant shall be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock as have been purchased under the Option and for which certificates of stock have been registered in the Participant’s name.
(h)
Options in Substitution for Options Granted by Other Employers
. Options may be granted under the Plan from time to time in substitution for options held by individuals providing services to corporations or other entities who become Employees, Consultants or Directors as a result of a merger or consolidation or other business transaction with the Company or any Affiliate.
VIII.
RESTRICTED STOCK AWARDS
(a)
Forfeiture Restrictions To Be Established by the Committee
. Shares of Common Stock that are the subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Participant and an obligation of the Participant to forfeit and surrender the shares to the Company under certain circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the Committee may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more Performance Goals, (ii) the Participant’s continued employment with the Company or continued service as a Consultant or Director for a specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion, or (iv) a combination of any of the foregoing. Each Restricted Stock Award may have different Forfeiture Restrictions, in the discretion of the Committee.
(b)
Other Terms and Conditions
. Common Stock awarded pursuant to a Restricted Stock Award shall be represented by a stock certificate registered in the name of the Participant. Unless provided otherwise in an Award Agreement, the Participant shall have the right to receive dividends with respect to Common Stock subject to a Restricted Stock Award, to vote Common Stock subject thereto and to enjoy all other stockholder rights, except that (i) the Participant shall not be entitled to delivery of the stock certificate until the Forfeiture Restrictions have expired, (ii) the Company shall retain custody of the stock until the Forfeiture Restrictions have expired, (iii) the Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions have expired, and (iv) a breach of the terms and conditions established by the Committee pursuant to the Award Agreement shall cause a forfeiture of the Restricted Stock Award. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to Restricted Stock Awards, including, but not limited to, rules pertaining to the termination of employment or service as a Consultant or Director (by retirement, disability, death or otherwise) of a Participant prior to expiration of the Forfeitures Restrictions. Such additional terms, conditions or restrictions shall be set forth in an Award Agreement made in conjunction with the Award. Notwithstanding anything herein to the contrary, unless otherwise set forth in an Award Agreement, dividends that are attributable to any particular share of Restricted Stock shall be withheld by the Committee and shall be distributed to the Participant upon the release of
11
restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
(c)
Payment for Restricted Stock
. The Committee shall determine the amount and form of any payment for Common Stock received pursuant to a Restricted Stock Award, provided that in the absence of such a determination, a Participant shall not be required to make any payment for Common Stock received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.
(d)
Committee’s Discretion to Accelerate Vesting of Restricted Stock Awards
. The Committee may, in its discretion and as of a date determined by the Committee, fully vest any or all Common Stock awarded to a Participant pursuant to a Restricted Stock Award and, upon such vesting, except as provided by the Committee, all restrictions applicable to such Restricted Stock Award shall terminate as of such date. Any action by the Committee pursuant to this Subsection may vary among individual Participants and may vary among the Restricted Stock Awards held by any individual Participant. Notwithstanding the preceding provisions of this Subsection, the Committee may not take any action described in this Subsection with respect to a Restricted Stock Award that has been designated as a Qualified Performance-Based Award.
(e)
Restricted Stock Award Agreements
. At the time any Award is made under this Article VIII, the Company and the Participant shall enter into a Restricted Stock Award Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may determine to be appropriate. The terms and provisions of the respective Restricted Stock Award Agreements need not be identical. Subject to the restriction set forth in the last sentence of Subsection (d) above, the Committee may, in its sole discretion, amend an outstanding Restricted Stock Award Agreement from time to time in any manner that is not inconsistent with the provisions of the Plan, including, without limitation, Article XIV.
(f)
Legends on Restricted Stock
. Certificates, if any, representing Common Stock awarded to a Participant pursuant to a Restricted Stock Award shall bear a legend as determined by the Committee, containing such information as the Committee deems appropriate until the lapse of all restrictions with respect to such Common Stock.
IX.
PHANTOM STOCK AWARDS
(a)
Phantom Stock Awards
. Phantom Stock Awards are rights to receive shares of Common Stock (or the Fair Market Value thereof), or rights to receive an amount equal to any appreciation or increase in the Fair Market Value of Common Stock over a specified period of time, which vest over a period of time as established by the Committee, with or without satisfaction of any Performance Criteria or objectives, as determined by the Committee. The Committee may, in its discretion, require payment or other conditions of the Participant respecting any Phantom Stock Award, including imposition of any Forfeiture Restrictions as determined in its sole discretion.
(b)
Award Period
. The Committee shall establish, with respect to and at the time of each Phantom Stock Award, a period over which the Award shall vest with respect to the Participant.
12
(c)
Awards Criteria
. In determining the value of Phantom Stock Awards, the Committee shall take into account a Participant’s responsibility level, performance, potential, other Awards, and such other considerations as it deems appropriate.
(d)
Payment
. Following the end of the vesting period for a Phantom Stock Award (or at such other time as the applicable Phantom Stock Award Agreement may provide), the holder of a Phantom Stock Award shall be entitled to receive payment of an amount, not exceeding the maximum value of the Phantom Stock Award, based on the then vested value of the Award. Payment of a Phantom Stock Award may be made in cash, Common Stock, or a combination thereof as determined by the Committee. Payment shall be made in a lump sum or in installments as prescribed by the Committee. Any payment to be made in cash shall be based on the Fair Market Value of the Common Stock on the payment date. Cash dividend equivalents may be paid during or after the vesting period with respect to a Phantom Stock Award, as determined by the Committee in an Award Agreement. In the event that payment is not made at the time vesting occurs, the Phantom Stock Award Agreement for the Phantom Stock Award shall contain provisions that comply with the requirements of Code Section 409A.
(e)
Termination of Award
. A Phantom Stock Award shall terminate if the Participant does not remain continuously in the employ of the Company and its Affiliates or does not continue to perform services as a Consultant or Director for the Company and its Affiliates at all times during the applicable vesting period, except as may be otherwise determined by the Committee. At the time the Award is issued, the Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to the Phantom Stock Award, including, but not limited to, rules pertaining to the termination of employment or service as a Consultant or Director (by retirement, disability, death or otherwise) of a Participant prior to expiration of the Forfeitures Restrictions. Such additional terms, conditions or restrictions shall be set forth in a Phantom Stock Award Agreement made in conjunction with the Award.
(f)
Phantom Stock Award Agreements
. At the time any Award is made under this Article X, the Company and the Participant shall enter into a Phantom Stock Award Agreement setting forth each of the matters contemplated hereby, and such additional matters as the Committee may determine to be appropriate. The terms and provisions of the respective Phantom Stock Award Agreements need not be identical.
X.
STOCK APPRECIATION RIGHTS
(a)
Stock Appreciation Rights
. A Stock Appreciation Right is an Award that may or may not be granted in tandem with an Option, and entitles the holder to receive an amount equal to the difference between the Fair Market Value of the shares of Common Stock at the time of exercise of the Stock Appreciation Right and the exercise price, subject to the applicable terms and conditions of the tandem options and the following provisions of this Article X.
(b)
Stock Appreciation Right Period
. The term of each Stock Appreciation Right shall be as specified by the Committee at the date of grant, but in no event shall a Stock Appreciation Right be exercisable after the expiration of ten (10) years from the date of grant, and if granted in tandem with an Option, the expiration of the term shall not be later than the expiration date for the related Option. If neither the Stock Appreciation Right nor the related
13
Option is exercised before the end of the day on which the Stock Appreciation Right ceases to be exercisable, such Stock Appreciation Right shall be deemed exercised as of such date and payment shall be made to the holder in cash.
(c)
Exercise
. A Stock Appreciation Right shall entitle the holder thereof to receive, upon the exercise of the Stock Appreciation Right, shares of Common Stock (valued at their Fair Market Value at the time of exercise), cash, or a combination thereof, in the discretion of the Committee, in an amount equal in value to the excess of the Fair Market Value of the shares of Common Stock subject to the Stock Appreciation Right as of the date of such exercise over the exercise price of the Stock Appreciation Right. If granted in tandem with an Option, the exercise of a Stock Appreciation Right will result in the surrender of the related Option and, unless otherwise provided by the Committee in its sole discretion, the exercise of an Option will result in the surrender of a related Stock Appreciation Right, if any. Notwithstanding the foregoing or anything to the contrary, with respect to Stock Appreciation Rights not granted in tandem with an Option, the exercise price of such a Stock Appreciation Right, subject to adjustment as provided in Article XIII, shall not be less than the Fair Market Value of a share of Common Stock on the date such Stock Appreciation Right is granted. Further, except as provided in Article XIII, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Stock Appreciation Rights or cancel, exchange, substitute, buyout or surrender outstanding Stock Appreciation Rights in exchange for cash, other Awards or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Stock Appreciation Rights without stockholder approval to the extent that stockholder approval is required by law or applicable exchange requirement, or, except as the Committee may otherwise deem advisable, to the extent necessary to avoid adverse accounting treatment.
(d)
Stock Appreciation Right Agreements
. At the time any Award is made under this Article X, the Company and the Participant shall enter into a Stock Appreciation Right Agreement setting forth each of the matters contemplated hereby, and such additional matters as the Committee may determine to be appropriate. The terms and provisions of the respective Stock Appreciation Right Agreements need not be identical.
XI.
STOCK UNITS
(a)
Stock Units
. The Committee may, subject to the limitations of the Plan and the availability of shares as provided under Article V(a), grant Stock Units to eligible individuals upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions. A “Stock Unit” Award is the grant of a right to receive shares of Common Stock and/or cash in the future.
(b)
Forfeiture Restrictions To Be Established by the Committee
. The minimum vesting, Performance Period or other Forfeiture Restrictions for Awards of Stock Units shall be determined by the Committee.
(c)
Terms and Conditions of Awards
. For each Participant, the Committee will determine the timing of awards; the number of Stock Units awarded; the value of Stock Units, which may be stated either in cash or in shares of Common Stock; any performance measures used for determining whether the Stock Units are earned; the number of earned Stock Units that
14
will be paid in cash and/or shares of Common Stock; whether dividend equivalents will be paid on Stock Units, either currently or on a deferred basis; and any other matters the Committee determines appropriate.
(d)
Payment
. Payment for Stock Units earned shall be wholly in cash, wholly in Common Stock or in a combination of the two, in a lump sum or installments, and subject to vesting requirements and such other conditions as the Committee shall provide. The Committee will determine the number of earned Stock Units to be paid in cash and the number to be paid in Common Stock. For Stock Units payable in shares of Common Stock, one share of Common Stock will be paid for each share earned, or cash will be paid for each share earned equal to either (i) the Fair Market Value of a share of Common Stock at the delivery date, as applicable, or (ii) the Fair Market Value of the Common Stock averaged for a number of days determined by the Committee. For Stock Units awarded in cash, the value of each share earned will be paid in its initial cash value, or shares of Common Stock will be distributed based on the cash value of the shares earned divided by (i) the Fair Market Value of a share of Common Stock at the delivery date or end of the Performance Period, as applicable, or (ii) the Fair Market Value of a share of Common Stock averaged for a number of days determined by the Committee. In the event that payment is not made at the time vesting occurs, the Award Agreement for the Stock Unit shall contain provisions that comply with the requirements of Code Section 409A.
(e)
Stock Unit Agreements
. At the time any Award is made under this Article XI, the Company and the Participant shall enter into a Stock Unit Agreement setting forth each of the matters contemplated hereby, and such additional matters as the Committee may determine to be appropriate. The terms and provisions of the respective Stock Unit Agreements need not be identical.
XII.
PERFORMANCE AWARDS
(a)
Purpose
.
The purpose of this Article XII is to provide the Committee the ability to (i) grant Restricted Stock Awards, Stock Units, and Phantom Stock Awards as Qualified Performance-Based Awards, and (ii) grant Performance Awards (including, for example, Restricted Stock Awards, Stock Units, Phantom Stock Awards, Options and/or Stock Appreciation Rights) that are settled in cash or shares of Common Stock based on the satisfaction of Performance Criteria and, where applicable, to cause such awards to be Qualified Performance-Based Awards. If the Committee, in its discretion, decides to grant to a Covered Employee an Award that is intended to constitute a Qualified Performance-Based Award, the provisions of this Article XII shall control over any contrary provision contained herein; provided, however, that the Committee may grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals that do not satisfy the requirements of this Article XII.
(b)
Performance Measures and Performance Period
. A Performance Award shall be awarded to a Participant contingent upon future performance of the Company or any Affiliate, division, or department thereof during the Performance Period. The Committee shall designate (i) the Performance Criteria for each Performance Award, (ii) the Performance Period for each Performance Award, and (iii) the number of shares of Common Stock subject to, or the maximum value of, the Performance Award. The Committee, in its sole discretion, may provide
15
for an adjustable Performance Award value based upon the level of achievement of the Performance Goals.
(c)
Awards Criteria
. In determining the value of Performance Awards, the Committee shall take into account a Participant’s responsibility level, performance, potential, other Awards, and such other considerations as it deems appropriate. The Committee, in its sole discretion, may provide for a reduction in the value of a Participant’s Performance Award (including any Qualified Performance-Based Award) during a Performance Period.
(d)
Payment
. Following the end of the Performance Period, the holder of a Performance Award shall be entitled to receive payment of an amount not exceeding the number of shares of Common Stock subject to, or the maximum value of, the Performance Award, based on the achievement of the performance measures for such Performance Period, as determined and certified in writing by the Committee. Payment of a Performance Award may be made in a lump sum in cash, Common Stock, or a combination thereof, as determined by the Committee, and shall be made no later than two and one-half (2-1/2) months after the end of the Performance Period or such other time as complies with Code Section 409A. If a Performance Award covering shares of Common Stock is to be paid in cash, such payment shall be based on the Fair Market Value of the Common Stock on the payment date.
(e)
Termination of Award
. A Performance Award shall terminate if the Participant does not remain continuously in the employ of the Company and its Affiliates or does not continue to perform services as a Consultant or Director for the Company and its Affiliates at all times during the applicable Performance Period, except as may be determined by the Committee.
(f)
Performance Award Agreements
. At the time any Award is made under this Article XII, the Company and the Participant shall enter into a Performance Award Agreement setting forth each of the matters contemplated hereby, and such additional matters as the Committee may determine to be appropriate. The terms and provisions of the respective Performance Award Agreements need not be identical.
(g)
Special Rules for Qualified Performance-Based Awards
.
(1)
Applicability
. This Subsection (g) shall apply only to Awards made to those Covered Employees selected by the
Committee to receive Qualified Performance-Based Awards. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the relevant Performance Period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.
(2)
Procedures with Respect to Qualified Performance-Based Awards
. To the extent necessary to comply with the Qualified Performance-Based Award requirements of Code Section 162(m)(4)(C), with respect to any Award
that may be granted to one or more Covered Employees, no later than ninety (90) days following the
16
commencement of any fiscal year in question or any other designated fiscal period or period of service (or such other time as may be required or permitted by Code Section 162(m)), the Committee shall, in writing:
(i)
designate one or more Covered Employees,
(ii)
identify one or more Performance Criteria to be used in establishing the Performance Goals,
(iii)
establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and
(iv)
specify the relationship between such performance criteria and the Performance Goals and the amounts of such Performance Awards, as applicable, to be earned by each Covered Employee for such Performance Period.
Following the completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period.
No Award or portion thereof that is subject to the satisfaction of any condition shall be considered to be earned or vested until the Committee certifies in writing that the conditions to which the distribution, earning or vesting of such Award is subject have been achieved. The Committee may disregard or offset the effect of any “Extraordinary Items” in determining the attainment of Performance Goals. The Committee may not increase during a year the amount of a Qualified Performance-Based Award that would otherwise be payable upon satisfaction of the conditions, but may reduce or eliminate the amount of a Qualified Performance-Based Award; provided, that, the exercise of such negative discretion would not cause the Qualified Performance-Based Award to fail to qualify as “qualified performance-based compensation” under Code Section 162(m).
(3)
Payment of Qualified Performance-Based Awards
. Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company or a subsidiary on the day a Qualified Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a Participant shall be eligible to receive payment pursuant to a Qualified Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved.
(4)
Dividends and Other Distributions
. Unless otherwise provided in an Award Agreement, a
Participant shall not be paid any dividends or other distributions with respect to Qualified Performance-Based Awards until the Participant has become vested in the shares covered by the Qualified Performance-Based Awards. At the time of vesting, the Participant shall receive a cash payment equal to the aggregate cash dividends (without interest)
(other than distributions in shares)
that the
Participant
would have received if the Participant had owned all of the shares that vested for the period beginning on the date of the Award, and ending on the date of vesting or payment. No dividends shall be paid to the Participant with respect to any Qualified Performance-Based Awards that are forfeited by the Participant.
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(5)
Additional Limitations
. Notwithstanding any other provision of the Plan, any Award granted to a Covered Employee that is intended to constitute a Qualified Performance-Based Award shall be subject to any additional
limitations set forth in Code Section 162(m) or any regulations or rulings issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Code Section 162(m)(4)(C), and the Plan shall be deemed amended to the extent necessary to conform to such requirements.
(6)
Effect on Other Plans and Arrangements
. Nothing contained in this Subsection will be deemed in any way to limit or restrict the Committee from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
XIII.
RECAPITALIZATION OR REORGANIZATION
(a)
No Effect on Right or Power
. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s or any Affiliate’s capital structure or its business, any merger or consolidation of the Company or any Affiliate, any issue of debt or equity securities ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any Affiliate or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.
(b)
Adjustment upon Changes in Capital Structure and Similar Events
. In the event of (i) any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire shares of Common Stock or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Corporate Change) that affects the shares of Common Stock, or (ii) unusual or nonrecurring events (including, without limitation, a Corporate Change) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make any such adjustments in such manner as it may deem equitable, including without limitation any or all of the following:
(1)
adjusting any or all of (A) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Article V of the Plan) and (B) the terms of any outstanding Award, including, without limitation, (1) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards
18
or to which outstanding Awards relate, (2) the exercise price or strike price with respect to any Award and (3) any applicable performance measures (including, without limitation, Performance Criteria and Performance Goals);
(2)
providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event; and
(3)
cancelling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, shares of Common Stock, other securities or other property, or any combination thereof, the value of such Awards net of any amount payable therefor, if any, as determined by the Committee (which if applicable may be based upon the price per share of Common Stock received or to be received by other stockholders of the Company in such event), including without limitation, in the case of an outstanding Option or Stock Appreciation Right, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the shares of Common Stock subject to such Option or Stock Appreciation Right over the aggregate exercise price or strike price of such Option or Stock Appreciation Right, respectively (it being understood that, in such event, any Option or Stock Appreciation Right having a per share exercise price or strike price equal to, or in excess of, the Fair Market Value of a share of Common Stock subject thereto may be canceled and terminated without any payment or consideration therefor; and it being further understood that any Award that is unvested at the time of any such event may be canceled and terminated without any payment or consideration therefor);
provided, however, that in the case of any “equity restructuring” (within the meaning of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation (formerly, FASB Statement 123R)), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustment in Incentive Stock Options under this Article XIII (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting a “modification” within the meaning of Code Section 424(h)(3), and any adjustments under this Article XIII shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the 1934 Act, to the extent applicable. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
(c)
Accelerated Vesting
. Notwithstanding anything herein to the contrary, unless otherwise provided in an Award Agreement, in the event that a Participant is terminated by the Company or an Affiliate without Cause within six (6) months following a Corporate Change, all unvested Awards then held by such Participant shall vest in full.
(d)
Stockholder Action
. Any adjustment provided for in the above Subsections shall be subject to any required stockholder action.
(e)
No Adjustments unless Otherwise Provided
. Except as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible
19
into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to Awards theretofore granted or the purchase price per share, if applicable.
(f)
Code Section 409A Provisions with Respect to Adjustments
. Notwithstanding the foregoing: (i) any adjustments made pursuant to this Article to Awards that are considered “deferred compensation” within the meaning of Code Section 409A shall be made in compliance with the requirements of Code Section 409A unless the Participant consents otherwise; (ii) any adjustments made to Awards that are not considered “deferred compensation” subject to Code Section 409A shall be made in such a manner as to ensure that after such adjustment, the Awards either continue not to be subject to Code Section 409A or comply with the requirements of Code Section 409A unless the Participant consents otherwise; and (iii) the Committee shall not have the authority to make any adjustments under this Section to the extent that the existence of such authority would cause an Award that is not intended to be subject to Code Section 409A to be subject thereto.
XIV.
AMENDMENT AND TERMINATION
The Board in its discretion may terminate the Plan at any time. The Board shall have the right to alter or amend the Plan or any part thereof from time to time; provided that no change in the Plan may be made that would materially impair the rights of a Participant with respect to an Award theretofore granted without the consent of the Participant, except any such alteration or amendment made to comply with applicable law, tax rules, stock exchange rules or accounting rules, which may be made without a Participant’s consent, and provided, further, that the Board may not, without approval of the stockholders of the Company, (i) amend the Plan to increase the maximum aggregate number of shares that may be issued under the Plan or change the class of individuals eligible to receive Awards under the Plan, or (ii) amend or delete Section VII(f). Subject to Section VII(f), the Committee may alter or amend the terms of any Award theretofore granted, including any Award Agreement, retroactively or otherwise, but no such amendment shall cause an Award that is intended to qualify as a Qualified Performance-Based Award not to so qualify or otherwise be inconsistent with the terms and conditions of the Plan or materially impair the rights (with respect to such Award) of the Participant to whom such Award was granted without the consent of the Participant, except any such amendment made to cause the Plan or such Award to comply with applicable law, tax rules, stock exchange rules or accounting rules, which may be made without a Participant’s consent.
XV.
MISCELLANEOUS
(a)
No Right To An Award
. Neither the adoption of the Plan nor any action of the Board or of the Committee shall be deemed to give any individual any right to be granted an Option, a right to a Restricted Stock Award, a right to a Performance Award, a right to a Stock Appreciation Right, a right to a Stock Unit, or a right to a Phantom Stock Award, or any other rights hereunder except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth
20
therein. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the performance of its obligations under any Award.
(b)
No Rights to Continued Service
. Nothing contained in the Plan shall (i) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting or advisory relationship with the Company or any Affiliate or (ii) interfere in any way with the right of the Company or any Affiliate to terminate his or her employment or consulting or advisory relationship at any time. Nothing contained in the Plan shall confer upon any Director any right with respect to continuation of membership on the Board.
(c)
Other Laws; Withholding
. The Company shall not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules and regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules and regulations available for the issuance and sale of such shares. No fractional shares of Common Stock shall be delivered. The Company shall have the right to deduct in connection with all Awards any taxes required by law to be withheld and to require any payments required to enable it to satisfy its withholding obligations.
(d)
No Restriction on Corporate Action
. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Participant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.
(e)
Restrictions on Transfer
. An Award (other than an Incentive Stock Option, which shall be subject to the transfer restrictions set forth in Article VII(c)) shall not be transferable otherwise than (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules thereunder, or (iii) with the consent of the Committee.
(f)
Termination of Awards or Disgorgement of Funds Triggered By Restatement of the Company’s Financial Results
. In accordance with Section 16 of the Company’s November 17, 2011 Amended and Restated Corporate Governance Guidelines (or as such guidelines may be subsequently amended and restated), in the event of any restatement of the Company’s financial results due to material noncompliance with any financial reporting requirements under securities law or due to misconduct, the Committee shall review the incentive and/or equity compensation Awards granted under the Plan to the Company’s current and former executive officers during or for the period for which such financial results are or will be restated and shall take any appropriate action, as determined by the Committee (including, but not limited to, termination of Awards or repayment of Award proceeds to the Company), consistent with the Sarbanes—Oxley Act of 2002, the Dodd–Frank Wall Street Reform and
21
Consumer Protection Act or such other applicable law, with respect to any such incentive and/or equity compensation Awards granted hereunder. As a condition to Awards hereunder, all Participants shall be deemed to have consented to such action.
(g)
Government and Other Regulations
.
(1)
The obligation of the Company to settle Awards in Common Stock or other consideration shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. The Committee shall have the authority to provide that all certificates for Common Stock or other securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award agreement, applicable securities laws, or the rules, regulations and requirements of the U.S. Securities and Exchange Commission or other similar regulatory authority, any securities exchange or inter-dealer quotation system upon which such shares or other securities are then listed or quoted and any other applicable U.S. federal, state, local or non—U.S. laws, and, without limiting the generality of Article VIII of the Plan, the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it, in its sole discretion, deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.
(2)
The Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Common Stock from the public markets, the Company’s issuance of Common Stock to the Participant, the Participant’s acquisition of Common Stock from the Company and/or the Participant’s sale of Common Stock to the public markets illegal, impracticable or inadvisable, or if the vesting, exercisability or grant of such Award could result in an adverse tax, legal or regulatory result to the Company, any Affiliate of the Company or any of its or their equity holders. If the Committee determines to cancel all or any portion of an Award in accordance with the foregoing, the Company shall pay to the Participant an amount equal to the excess of (i) the Fair Market Value of the Common Stock subject to such Award or portion thereof canceled (such value to be determined as of the applicable exercise date, or the date that the shares would have been vested or delivered, as applicable), over (ii) the aggregate exercise price or strike price (in the case of an Option or Stock Appreciation Right, as applicable) or any amount payable as a condition of delivery of Common Stock (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof, but in no event sooner than such time as permitted by applicable law, contract, market considerations, or sooner than such time at which payment to the Participant shall not result in an adverse tax, legal or regulatory result to the Company, any Affiliate, or any of its or their equity holders, and in no event sooner than as permitted under Code Section 409A, if applicable. For the avoidance of doubt, if the aggregate Fair Market Value is less than or equal to the applicable aggregate exercise
22
price or strike price, then the Committee may cancel such Award without consideration therefor.
(h)
Payments to Persons Other Than Participants
. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
(i)
Nonexclusivity of the Plan
. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval, to the extent applicable, shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.
(j)
No Trust or Fund Created
. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company.
(k)
Relationship to Other Benefits
. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.
(l)
Not an ERISA Plan
. The Plan is not a qualified deferred compensation plan under Code Section 401(a), nor is it the type of plan that is subject to ERISA.
(m)
Right of Offset
. The Company will have the right to offset against its obligation to deliver shares of Common Stock, cash or other consideration under the Plan or any Award Agreement any outstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any Awards, or amounts repayable to the Company pursuant to tax equalization, housing, automobile or other employee programs) that the Participant then owes to the Company and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement; provided, however, that no such offset shall be permitted if it would constitute an “acceleration” of a payment hereunder within the meaning of Code Section 409A, and that the Company shall not
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have the right to offset any amount over $5,000 with respect to Awards subject to Code Section 409A. This right of offset shall not be an exclusive remedy and the Company’s election not to exercise the right of offset with respect to any amount payable to a Participant shall not constitute a waiver of this right of offset with respect to any other amount payable to the Participant or any other remedy.
(n)
Code Section 409A
. It is the intention of the Company that no Award shall be “deferred compensation” subject to Code Section 409A unless and to the extent that the Committee specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly. The terms and conditions governing any Awards that the Committee determines will be subject to Code Section 409A, including any rules for elective or mandatory deferral of the delivery of cash or shares of Common stock pursuant thereto, shall be set forth in the applicable Award Agreement, and shall comply in all respects with Code Section 409A. Notwithstanding any provision herein to the contrary, any Award issued under the Plan that constitutes a deferral of compensation under a “nonqualified deferred compensation plan” as defined under Code Section 409A(d)(1) and is not specifically designated as such by the Committee shall be modified or cancelled to comply with the requirements of Code Section 409A, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto. Unless expressly permitted by the Committee in an Award Agreement, a Participant does not have any right to make any election regarding the time or form of any payment pursuant to an Award. Notwithstanding that this Plan is intended to comply with or be exempt from Code Section 409A, neither the Company, any Affiliates, the Board, the Committee nor any other party guarantees such compliance or exemption and no such party shall have any liability to any Participant if an Award intended to comply with or be exempt from Code Section 409A does not comply or is not exempt from Code Section 409A as intended.
(o)
International Participants
. With respect to Participants who reside or work outside of the United States, the Committee may in its sole discretion amend the terms of the Plan or outstanding Awards with respect to such Participants (or adopt a sub-plan) in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.
(p)
Severability
. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(q)
Obligations Binding on Successors
. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
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(r)
Other Agreements
. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Stock under an Award, that the Participant execute lock-up, shareholder or other agreements, as it may reasonably determine in its sole and absolute discretion.
(s)
Expenses; Titles and Headings
. The expenses of administering the Plan shall be borne by the Company and its Affiliates. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.
(t)
Governing Law
.
The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.
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